Negative yields come to India, as RBI tries to put a leash on short sellers

The ongoing tussle between the Reserve Bank of India (RBI) and government bond traders has seen a fresh twist. In a historic first for the Indian bond market, the central bank on Friday enabled quotes for negative yields on government securities in the negotiated dealing system – order matching (NDS-OM) to choke short sellers in the bond market, who have run amok in recent weeks.

Bond dealers said the 6.17 per cent government bond maturing in 2021 was offered at a yield of minus 1.5 per cent, a first in the government securities market.

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