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Bond market support intensifies as central bank buying offers limited cushion
Record bond purchases by the central bank offered only partial relief in 2025, with investors entering 2026 cautious due to supply pressures, borrowing needs, and uncertain interest rate outlook.
Indian bond markets saw heavy central bank intervention during 2025, with record purchases aimed at containing yields amid tightening global financial conditions. Despite these operations, analysts noted limited relief for bond investors heading into 2026 as supply pressures, fiscal borrowing needs, and evolving rate expectations persist. Market participants remain cautious, monitoring inflation trends and policy signals to assess durability of support.