Why bonds dealers chose to ignore Shaktikanta Das' nationalist call

There's a tug-of-war between the RBI and the bond market, as the central bank refuses to accept higher yields

The Reserve Bank of India (RBI), the merchant banker to the government, is required to borrow Rs 2.16 trillion from the market in February and March by auctioning government securities. The number goes up to Rs 4.5 trillion if state development loans are also included.

In such a scenario, the RBI decided to cancel the auction of two government securities totalling Rs 22,000 crore on Friday – the day it announced the outcome of its monetary policy review. Two other papers were devolved on primary dealers.

The auctions were cancelled because the central bank was not comfortable with the higher