The RBI is holding talks this week with bond traders, banks, and primary dealers to assess second-half government borrowing plans.
India is slated to borrow ₹6.8 trillion in H2, down from ₹8 trillion in H1.
Yields on ultra-long bonds (30–50 years) jumped 30 bps in August, far outpa
cing the 10-year’s 19 bps rise.
Banks are reporting sharp mark-to-market losses and urging RBI to reconsider long-term bond issuance.
The market concern stems from rate-hold signals paired with rising inflation expectations above 4% fo
r 2026.
A surprise GST cut announcement also rattled investor confidence.
Participants are pushing for more conventional maturities to curb
volatility.
RBI’s response will draw scrutiny amid weak institutional bond appetite.
The bond meeting may shape fiscal-market dynamics ahead of the borrowing
schedule release.
Stability in bond issuance strategy may become key to restore confidence.