Investors in India’s $950 billion sovereign bond market are on tenterhooks this week as they await another huge borrowing plan from the government and central bank guidance on measures to support the market.
Consensus is for bond sales to remain elevated in the fiscal year starting April when Prime Minister Narendra Modi’s administration outlines its budget later on Monday, adding to upward pressure on yields. This sets the scene for the Reserve Bank of India’s meeting on Friday, with traders clamoring for signs on how policy makers may drain excess liquidity from the system.
“It’s a critical week for the bond market with these two big events that are going to give direction to yields,” said Harish Agarwal, a bond trader at FirstRand Bank in Mumbai. “The market will eagerly await the RBI’s stance on liquidity and…
