RBI encourages investment in sovereign bonds as part of liquidity measures

The pivot from RBI will help the government, which has said it will sell 1.1 trillion rupees more debt for the fiscal half ending in March

The Reserve Bank of India is making longer-tenor sovereign bonds attractive again.

Quantum Mutual Fund has moved to the 10-14 year segment after staying in duration of up to three years in August in its 691 million rupees ($9.4 million) Dynamic Bond Fund. UTI Asset Management Co. has turned overweight on bonds maturing in up to 15 years, after cutting duration two months ago.

The strategy change was prompted by a series of liquidity measures announced by the Reserve Bank of India earlier this month, including doubling the size of open market operations. That’s spurred expectations that the central bank