Puttaparthi: India’s central bank would take market behaviour into account while buying back bonds from investors, its governor said on Friday, a day after accepting less than half the target amount in a buyback auction.
On Thursday, the central bank bought back bonds worth Rs26.57 billion through an open market operation (OMO), after offering to buy back Rs60 billion of bonds.
“We will take the market behaviour into consideration in our own response,” Duvvuri Subbarao told reporters in the southern Indian town of Puttaparthi on Friday.
The Reserve Bank of India (RBI) plans to buy back up to Rs800 billion of bonds by the end of September. It intends to sell bonds worth Rs2.99 trillion during the period and 4.51 trillion for the full fiscal year.
The bond buyback was aimed at calming investors’ nerves, shaken because of a record government borrowing plan. The central bank has so far bought back Rs444.6 billion worth of bonds from the market.