Issuance Front Loaded

Yields mostly higher, 10-year yield last at 6.166%. It was announced yesterday that India would issue INR 7.24tn of government debt in the first half of FY 2021, that equates to around 60% of the full-year target. This is in line with expectations, auctions are likely remain under pressure looking forward, price action will be dictated by the type and frequency of OMOs. According to a statement weekly auctions will be between INR 280bn and INR 320bn.

• India's government announced it will retain a 2%-6% inflation target for the RBI, taking the central bank's earlier recommendation. The flexible inflation targeting regime, known as FIT, will be effective for five years through 2026.There had been an argument to abandon the target band after an inflation overshoot in 2020 forced the RBI to put rate cuts on hold and limited policy options.
• Data yesterday showed India's current-account moved back to a deficit after three consecutive quarters of surplus, as the trade gap widened. ndia's current account balance recorded a deficit of $1.7 billion, or 0.2% of GDP, in Q4. Also released yesterday was key industries output, overall output fell 4.6% Y/Y, with coal and petroleum products the biggest drags.
• Elsewhere, the Indian government has announced plans to extend Emergency Credit Line Guarantee Scheme to cover enterprises in hospitality, travel and tourism, leisure and sports due to the adverse impact of the pandemic. The plan has been extended until June 30.
• Finally, India left limits on foreign investment in corporate bonds unchanged at 15% of the outstanding stock of the securities