Bond yields expected to jump 15-20 bps on govt's extra borrowing

The excess borrowing will, however, ease the pressure on the RBI's liquidity operation as banks will absorb the excess G-Secs

Bond yields are expected to jump 15-20 basis points when the market opens on Monday, in case the Reserve Bank of India (RBI) decides not to announce any open market operation (OMO) support, to help manage the huge spike in the government's borrowing programme.

On Friday, after markets closed, the government said it would be borrowing Rs 12 trillion for the full fiscal, instead of the originally planned Rs 7.88 trillion, due to the coronavirus (Covid-19) pandemic. Incidentally, earlier on the same day, the 10-year bond yields fell below 6 per cent for the first time since February 2009. The