Bonds jump most in a year after RBI cancels OMO debt sale

India's govt bonds have slumped since August due to a potential end to monetary easing, concern about rising supply and possible fiscal slippage

Sovereign bonds rose the most in a year in India after the central bank scrapped a debt sale due later this week that was designed to reduce banking liquidity.

The Reserve Bank of India won’t proceed with a Rs 10,000 crore auction under its open-market operations (OMOs) on Thursday after a review of liquidity conditions, it said after the market closed on Friday. The central bank has auctioned Rs 90,000 crore of the securities since the start of July.

India’s government bonds have slumped since August due to a potential end to monetary easing, concern about rising supply and possible fiscal slippage.