RBI move to cut reverse repurchase rate fuels rally in short-term bonds

India’s bond markets, reeling from increased supply from the government’s record-borrowing plans, won a reprieve from the central bank.
 

The Reserve Bank of India (RBI) cut the reverse repurchase rate to free up more cash for lending, fueling a rally in short-end bonds even as it dashed market hopes of massive debt purchases from the open market.
 

The yield on the 6.18 per cent 2024 bond fell 26 basis points to 5.48 per cent. The benchmark 10-year yield, in comparison, slid nine basis points to 6.35 per cent after dropping as much as 15 basis points before the measures were