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Bonds Supported By Lockdown Measures Ahead Of RBI

INDIA

Indian bonds are expected to be bid on Tuesday amid a second wave of COVID-19. India's economy is facing fresh pressure, as the latest virus wave spurs renewed countermeasures. The latest data shows active COVID-19 cases continuing to surge, with daily infections hitting new highs. Several states have tightened restrictions, including Maharashtra (14.1% share of GDP and home to economic powerhouse Mumbai), which imposed a lockdown for April. Earlier this week the government reported over 100,000 new cases on a single day for the first time. The number of vaccine doses administered as of April 4 reached 76 million, covering just 6.1% of the population while less than 1% have received two doses.

  • Markets await the RBI rate announcement tomorrow, the bank is expected to keep rates on hold but could address its plans to support the bond market amid worries over the markets ability to digest supply.
    • The RBI announced details of Friday's planned auctions for a total INR 320bn
      • INR 110bn new 2026 bonds
      • INR 100bn new 2035 bonds
      • INR 40bn 2033 floating bonds
      • INR 70bn 6.67% 2050
    • The RBI has increased the option to retain additional subscription against securities on sale to INR 80bn (INR 30bn previously)

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