Bond market disappointed with borrowing plan of Centre, states

Dealers say the huge supply is a concern at a time when volumes have thinned because of Covid

Bond yields shot up on Friday as dealers expressed disappointment on heavy weekly borrowing numbers, while there was no news on private placement with the Reserve Bank of India (RBI).

Despite the government and the RBI earmarking five specified securities for foreign portfolio investors (FPI), it will take quite time for FPIs to return and collect interest on Indian papers. In financial 2019-20 (FY20), FPIs sold Rs 48,710 crore worth of debt till February, and Rs 62,000 crore in March alone.

The 10-year bond yield closed at 6.31 per cent, up from its previous close of 6.14 per cent. The rupee closed