Global Bond Index Snub: RBI May Boost Debt Buying Amid Rising Yields

• Bloomberg Index Services deferred Indian bond inclusion in its Global Aggregate Index, disappointing market participants.
• The deferral raises the likelihood of the Reserve Bank of India (RBI) extending its record government debt buying to cushion the market.
• Analysts had anticipated $10 billion to $20 billion in foreign inflows if the inclusion had proceeded as expected.
• The 10-year Indian benchmark bond yield has risen by nearly 10 basis points since the index deferral announcement.
• Investors expect the RBI to conduct more open market operations (OMO) purchases, potentially 1.5-2 trillion rupees, in February-March.

Why It Matters: RBI likely to increase bond purchases to stabilize market after global index deferral and rising yields.