The RBI this week announced new open market operations aimed at stabilising long-term bond yields. We think this is a sign of things to come as the authorities aim to keep government borrowing costs in check in order to put the public debt trajectory on a sustainable path. Meanwhile, borrowers have been given another lifeline after the RBI clarified that the debt moratorium could be extended by up to 12 months under the new loan restructuring scheme. But in the absence of major financial support, significant damage to household, firm and bank balance sheets looks unavoidable.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services