India’s RBI Urges States to Diversify Borrowing Amid Record Fiscal Needs
The Reserve Bank of India has asked state governments to spread their borrowing across bond tenures rather than rely heavily on long-term issuances. This comes as states plan to borrow a record ₹12 trillion in fiscal year 2026. Heavy concentration in long terms has pushed bond yields up, causing concern among banks and fixed income investors. The RBI recommends using reissues of existing bonds to enhance liquidity and avoid market distortion from sudden supply pressure. The move aims to stabilize yields and promote smoother state borrowing.
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30 days ago
India’s RBI Urges States to Diversify Borrowing Amid Record Fiscal Needs
The Reserve Bank of India has asked state governments to spread their borrowing across bond tenures rather than rely heavily on long-term issuances. This comes as states plan to borrow a record ₹12 trillion in fiscal year 2026. Heavy concentration in long terms has pushed bond yields up, causing concern among banks and fixed income investors. The RBI recommends using reissues of existing bonds to enhance liquidity and avoid market distortion from sudden supply pressure. The move aims to stabilize yields and promote smoother state borrowing.
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India’s RBI Urges States to Diversify Borrowing Amid Record Fiscal Needs
about 1 month ago
1 min read
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RBI tells state governments to diversify debt issuance to manage yield pressure amid high borrowing plans.
The Reserve Bank of India has asked state governments to spread their borrowing across bond tenures rather than rely heavily on long-term issuances. This comes as states plan to borrow a record ₹12 trillion in fiscal year 2026. Heavy concentration in long terms has pushed bond yields up, causing concern among banks and fixed income investors. The RBI recommends using reissues of existing bonds to enhance liquidity and avoid market distortion from sudden supply pressure. The move aims to stabilize yields and promote smoother state borrowing.
The Reserve Bank of India has asked state governments to spread their borrowing across bond tenures rather than rely heavily on long-term issuances. This comes as states plan to borrow a record ₹12 trillion in fiscal year 2026. Heavy concentration in long terms has pushed bond yields up, causing concern among banks and fixed income investors. The RBI recommends using reissues of existing bonds to enhance liquidity and avoid market distortion from sudden supply pressure. The move aims to stabilize yields and promote smoother state borrowing.