RBI just bought $5.5B in bonds—here's why it matters
On Thursday, the Reserve Bank of India (RBI) bought government bonds worth ₹50,000 crore (about $5.5 billion)—its first big move like this since May.
The idea? Pump more cash into banks and make borrowing a bit easier.
The bonds, set to mature between 2029 and 2050, were snapped up at prices higher than most expected, which helped push interest rates down right after.
What's the bigger plan?
This is only part of RBI's ₹1 lakh crore December plan—they're doing another round for the same amount this month.
Plus, they're running a $5 billion currency swap this month to help with cash shortages caused by defending the rupee (which has had a rough year).
It's all about keeping money flowing smoothly in the system.
Will it be enough?
The bond buy did lower yields for now. But with global uncertainty and local pressures, rates could stay jumpy.
As economist Madhavi Arora puts it: RBI might need to add even more cash early next year if things don't settle down with foreign exchange and payments.