India Plans More Than $41 Billion in Bond Purchases
- Policymaker wants to cap 10-year yield under 6%, person said
- RBI to flatten yield curve to reflect inflation expectations
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The Reserve Bank of India will seek to buy more than 3 trillion rupees ($41 billion) of sovereign bonds in the next fiscal year to support the government’s borrowing plans, according to a person with knowledge of the matter.
That will exceed the 3 trillion rupees the RBI is expected to spend for the current year ending March, the person said, asking not to be identified as the deliberations are private. The intention is to cap the benchmark bond yield under 6%, while narrowing its spread with the repo rate to around 150 basis points, the person said.