Business Standard

How RBI should 'manage' the yield curve

None can question the central bank's policy of leaning against the rising yield but the problem is with the way it is being done

reserve bank of india, rbi

Tamal Bandyopadhyay
On February 24, in an interview to a national business news channel, Reserve Bank of India (RBI) Governor Shaktikanta Das once again urged the market to “trust” the central bank, which is for the “orderly evolution” of bond yield curve. He also explained why the yield curve is “public good”. “Yield management” doesn’t bring down the cost of government borrowing alone; it pares the cost of corporate borrowing as well since the pricing of corporate debt instruments is linked to government bonds.

Finally, he made a point that the bond market must read all messages from the RBI — its words,
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Feb 28 2021 | 10:16 PM IST

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