Bend it like RBI’s Das: yield curve management takes centre stage
Live MintThere is one curve that India’s central bank is determined to flatten—the yield curve. Das announced that the RBI would buy ₹1 trillion worth of government bonds from the secondary market in the first quarter of FY22. Calling it the secondary market G-sec acquisition programme, Das said the RBI will commit a specific amount upfront for open market purchases of bonds. The need for such a quantitative target was felt as bond yields have seen significant upward pressure since the Budget for FY2021-22, which placed the quantum of borrowings largely unchanged compared to the record market borrowings in FY21,” Gaurav Kapur, chief economist, IndusInd Bank, said in a note. With the RBI digging in deep into bond yields, the curve no longer reflects long-term inflation trends or even the loose fiscal policy needed to fight the pandemic.
History of this topic
Discover Related
)
)
)
