No relief for bond market as RBI may prune debt purchases by over 40%

Tightening the spigot on debt purchases is bad news for a market already jittery about heavy supply of paper from PM Modi's record $100 bn borrowing plan

India’s central bank is seen curtailing its support for the bond market, dashing hopes of relief for investors reeling under two straight months of declines.

The Reserve Bank of India may buy Rs 1.7 trillion ($24 billion) of debt in the year starting April 1, according to a Bloomberg News survey of traders and economists. That compares with an estimated record Rs 3 trillion spent on such purchases this fiscal period.

Tightening the spigot on purchases is bad news for a market already jittery about the heavy supply of paper from Prime Minister Narendra Modi’s record $100 billion borrowing plan.