In a tactical move to smooth India's debt maturity schedule, the Reserve Bank of India bought Rs 17,274 crore of its last switch auction of bonds—54 percent of the notified Rs 32,000 crore amount.
Key Highlights:
- The switch replaces near-duration bonds due between FY27–FY29 with longer-duration securities due after FY32
- This is the fourth such auction in FY26, and Rs 69,000 crore has already been transferred against the Rs 2.5 lakh crore provision made for the year
- RBI also purchased Rs 69,525 crore of bonds that will mature in subsequent years
Strategic Implications:
- The step will reduce redemption pressure within the forthcoming three years
- Helps manage fiscal deficit and maintain investor confidence amid rising yields
- Symbolizes RBI's cautious stance because market participants demanded a higher yield
Market Sentiment:
Selective offers, where four of nine securities provided were rejected, were a result of yield and rate-cut expectation sensitivity.
Source: Economic Times