Indian government bonds rally as states cut auction sizes
Indian government bond yields just dipped after states decided to shrink their weekly debt auctions.
With less new debt flooding the market, there's less pressure on prices—good news for anyone watching borrowing costs during this massive fundraising quarter.
Why does this matter?
Both the central and state governments are trying to raise a record ₹8 trillion this quarter.
That's a lot of borrowing, and usually it would push yields up.
But by easing off on state bond sales for now, the market gets some breathing room—making these bonds more attractive to big investors.
What else is helping?
The Reserve Bank of India has been stepping in too, buying up ₹2 trillion in bonds since December and planning even more purchases (plus a $10 billion currency swap).
This keeps money flowing smoothly and supports the recent rally.
The bigger picture
With both state cutbacks and RBI support, short-term relief is here—even as heavy borrowing looms ahead.
Swap rates are dipping too, showing that investors are adjusting to these shifts in supply and interest rates.
It's a reminder: when governments borrow big, every move counts for the markets.