RBI nets 1L/cr bond sales to absorb surplus liquidity
The Reserve Bank of India (RBI) has net sold ₹1 lakh crore worth of bonds this financial year (its biggest annual net bond sale in more than a decade).
This big move comes after a special dollar window for banks brought in more foreign money, which helped the rupee but also messed with short-term interest rates.
To keep things steady, RBI is selling bonds to soak up extra cash from the system.
Vikas Garg sees elevated term premium
Experts think RBI might tighten things even more soon, maybe by selling more bonds or tweaking bank rules.
Meanwhile, the government is borrowing differently, focusing on longer-term loans, which has investors rethinking their strategies and selling across the board.
As Vikas Garg, head of fixed income at Invesco Mutual Fund, puts it, these changes could keep the term premium elevated in the near term and shake up how people invest right now.