The Reserve Bank of India may be buying bonds to ease the impact of crude oil prices on bond yields.

The Reserve Bank of India may be increasing its support for the bond market as rising oil prices pose inflation risks to this oil-importing country. Data from the India Clearing Corporation shows that "other category" institutions, including the Reserve Bank of India, have bought bonds worth 522 billion rupees in the past 9 days, with nearly 39% of the purchases occurring on Wednesday. At the time of this buying operation, the Reserve Bank of India is intensifying efforts to stabilize the market: on one hand, intervening in the market to support the rupee exchange rate, and on the other hand, as the conflict in the Middle East may continue to disrupt regional oil supplies, the central bank will extend its support to the bond market. High oil prices may exacerbate inflation in this country, the world's most populous, broaden fiscal deficits, and thereby create pressure on both exchange rates and government bonds.