Market signals

A combination of factors has pushed up bond yields

- 

There is considerable anxiety in the financial markets over the rise in bond yields. As reported by this newspaper, commercial banks and other stakeholders have made several suggestions to the Reserve Bank of India (RBI), aiming to ease pressure on the bond market. It has been suggested that the RBI extend the bond issuance till March rather than concluding the annual sale in February. This will help reduce the weekly supply of bonds. Stakeholders have also suggested changes in the way state-government bonds are sold to reduce the spread. It has also been said that issuing ultra-long duration bonds like those with tenors of 30-50 years should be reduced. Banks have also underscored that the weekly issuance of bonds has increased significantly.