Daijiworld Media Network- New Delhi

New Delhi, Sep 10: From exporters reeling under punitive US tariffs to bond traders worried over rising yields, India’s central bank is under increasing pressure to step in and stabilize markets.

The Reserve Bank of India (RBI), which has often intervened when local or global developments threatened financial stability, is yet to announce any concrete measures in recent weeks. Earlier this year, the central bank had aggressively purchased bonds to support credit growth. However, with sovereign bond yields touching a five-month high in late August, traders are urging action.

“It’s hard to know whether the authorities should come in to stabilize the market or not, as the threshold for pain is different under each Governor,” said Nathan Sribalasundaram, Rates Strategist at Nomura Holdings Inc. “This Governor has taken a more relaxed approach, especially with regard to FX.”

The concerns deepened after US President Donald Trump slapped a 50% levy on Indian exports, raising fears of job losses and a slowdown in growth. Chief Economic Adviser V. Anantha Nageswaran has warned that the tariffs could shave 0.5% to 0.6% off India’s GDP this year.

Meanwhile, the government has cut consumption taxes worth Rs 4.8 lakh crore ($5.4 billion) and is preparing a relief package for exporters. But these moves have triggered concerns over widening fiscal pressures amid falling tax revenues.

Benchmark bond yields had spiked to 6.66% in late August before easing slightly, with banks pressing the RBI to reduce the supply of long-dated bonds as demand from insurers and pension funds wanes.