India's central bank has net sold bonds worth 1 trillion rupees this financial year, its biggest annual net bond sale in more than a decade, treasury officials said, with market participants expecting the total to double by December.
The Reserve Bank of India is withdrawing liquidity from a banking system flush with cash after it allowed lenders to raise dollars via a special window. While the inflow helped protect the nation's FX reserves and support the rupee as oil prices rose, it pushed overnight rates below the RBI policy rate.
