New Delhi plans to sell 320 billion rupees ($3.52 billion) of the 2035 10-year benchmark bond on Friday, in what would be the final auction of this note and the penultimate debt sale for the 2026 fiscal year.
Demand and ultimate yields on the papers are expected to be the key market drivers in March.
Meanwhile, ultra-long 30-year and 40-year bonds continued their rally, supported by stronger demand from insurers amid higher flows in recent weeks.
Earlier this week, Reuters reported that the Reserve Bank of India met with several market participants and received feedback on maintaining or reducing the share of ultra-long bonds in India’s total debt supply.
The market has found some relief since the central bank meeting, as traders expect the government to accept these recommendations and limit supply. India will release October-December GDP data on Friday evening. A Reuters poll predicts a figure of 7.2%.
“From a policy perspective, the strong recovery in growth reinforces expectations that the RBI will continue to take an extended pause. GDP growth for FY27 is expected at 7.5% (on old basis),” IDFC First Bank said in a note.
PRICES
India’s overnight index swap (OIS) yields rose following a rise in payments after the five-year swap failed to cross a key level.
The one-year OIS rate ended at 5.4975%, while the two-year OIS rate ended at 5.6250. The five-year OIS rate rose by 1 basis point to end at 6.0525%. ($1 = 90.8360 Indian Rupees)
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