Bond-Market Revolt Endangers India’s Fragile Recovery
- Opaque central bank policy puts 6% cap on yields at risk
- Traders want clarity over bond purchases by central bank
This article is for subscribers only.
Bond traders are upsetting India’s efforts to pull the economy out of its worst recession since 1952.
The government wants to sell a near record 12.1 trillion rupees ($167 billion) of bonds in the next fiscal year to support its spending program. Such supply is putting pressure on yields to rise, along with a global selloff in bonds. Yet central bank officials are reluctant to let the 10-year yield increase because of its importance as a benchmark rate for borrowing.