Bond yield surge threat is only agenda for traders from RBI policy

Traders in India are pinning their hopes on the central bank stepping in to manage bond-market liquidity at this week’s policy review as the market confronts record debt supply. 
 

The Reserve Bank of India faces the challenge of keeping bond yields in check as the government kicks off an unprecedented 14.31 trillion rupees ($190 billion) of annual borrowing in April. At the same time, surging oil prices threaten to accelerate inflation, putting pressure on policy makers to hike rates.

“Support from the RBI in the form of open-market purchases is crucial to keep yields contained, given the large borrowing program