Worst rout of sovereign bonds in 7 years may end with RBI's Rs 860 bn binge

The purchases have coincided with a rapid cooling in oil prices that helped drive the yearlong selloff in bonds, the worst run of quarterly losses since 2011

With India’s central bank emerging as the biggest buyer of government debt, some traders are calling time on a rout that’s lasted more than a year and sent benchmark yields soaring to a four-year high.

The Reserve Bank of India bought 860 billion rupees ($11.8 billion) of bonds between May and October, and plans to inject 400 billion rupees this month to replenish liquidity drained by its currency defense and a seasonal cash crunch. The purchases will help shrink the supply of paper for the fiscal second-half by 80 percent from a year earlier, according to estimates by Nomura Holdings