RBI's Das Stops Short Of Committing To OMO Schedule

Overview of comments from RBI's Das:

• Have given clear signal to bond markets
• Market perhaps was surprised by borrowing number
• Expect orderly evolution of yield curve
• Looking at range of bonds, not just 10yr
• Will take call on more state bond OMO
• Will take all policy measures as debt manager
• Reiterates borrowing will go in orderly manner
• RBI has done 3t rupees of OMOs in FY21
• No reason to believe RBI will do less OMOs in FY22
• Comfortable with current level of liquidity
• Have known, unknown tools for liquidity situation
• RBI's forward guidance much more explicit than before
• Though the comments are encouraging for bond market participants they do lack an explicit commitment to OMOs, yields have risen during the speech 10-year yield now up around 3bps from lows at 6.1655%, down 1bp on the session.