RBI Intervention Likely for Rupee, Bonds Post-Budget 2026 Amid Record Borrowing

• India's Union Budget 2026-27 outlines a record Rs 17.20 lakh crore gross market borrowing plan, raising concerns about supply-demand imbalances in government securities.
• The 10-year benchmark yield has been rising despite RBI rate cuts, keeping borrowing costs high for Centre and states.
• Finance Minister Nirmala Sitharaman acknowledges rising yields but emphasizes funding developmental activity; economists expect continued RBI intervention.
• The rupee is near record lows, having lost 10% against the dollar, pressured by global factors and patchy portfolio flows.
• RBI may intensify interventions through OMOs, FX sterilization, and potentially 'Operation Twist' to manage yields and stabilize the rupee.

Why It Matters: RBI intervention is anticipated to stabilize the rupee and bond yields following India's record post-Budget 2026 borrowing.