The Reserve Bank of India is set for another standoff with traders as it auctions a new benchmark 10-year bond.
While the current benchmark coupon was set at 5.85%, five traders surveyed by Bloomberg expects the central bank to sell the new bond at a cutoff yield of 6.1% at Friday’s auction.
The RBI has been locked in a tussle with the bond market as it seeks to keep the government’s borrowing costs low, while investors are demanding higher yields because of rising inflation and supply concerns. Setting a lower coupon for the new 10-year bond may lead to a