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Massive India Borrowing Loads Pressure on RBI to Tame Yields

  • Investor focus turns to key central bank meeting on Friday
  • Bonds extend selloff as near-record debt plan surprises market
Shaktikanta Das
Shaktikanta Das Photographer: Kanishka Sonthalia/Bloomberg
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India’s central bank is under pressure to step in to keep yields in check after the government surprised bond markets with a bigger-than-expected borrowing plan.

That puts the burden on Governor Shaktikanta Das to calm bond traders when he meets to decide policy on Friday. He’s already had to assuage them that a recent measure to mop up excess liquidity isn’t a step toward changing the RBI’s accommodative policy and the central bank has rejected bids at two auctions of benchmark debt after investors sought higher yields.