Bond investors are finding out that the Reserve Bank of India isn’t as generous as they thought.
Sovereign debt declined for a third day Friday, wiping out gains fueled by the RBI’s May 4 decision to inject cash by buying bonds. The measure has failed to revive demand for debt as it simply restores the cash drained by the authority to prop up a sliding rupee, traders say.
“The RBI could do more OMO purchases because of the run on the rupee,” said Vijay Sharma, executive vice president for fixed-income at PNB Gilts. The liquidity infusion gets “neutralized” when the