Core Insights - The Reserve Bank of India (RBI) is under pressure to intervene in the market due to rising bond yields and the impact of US tariffs on Indian exports [1][2][4]. Group 1: Market Conditions - Sovereign bond yields have reached a five-month high of 6.66% in late August, prompting calls for RBI intervention [5]. - The Indian rupee has depreciated by approximately 3% against the dollar this year, making it one of the worst-performing currencies in Asia [6]. Group 2: Economic Impact - President Trump's 50% tariff on Indian exports could potentially reduce India's GDP by 0.5% to 0.6% this year, raising concerns about trade competitiveness and economic growth [4]. - The Indian government has already cut consumption taxes, resulting in a revenue loss of ₹48,000 crore ($5.4 billion), which raises concerns about public finances amid slowing tax collections [5]. Group 3: RBI's Response Options - Analysts suggest that the RBI could intervene through secondary-market purchases or by rejecting bids at weekly bond auctions to stabilize the market [9]. - There is a debate among economists regarding the appropriateness of RBI intervention, with some arguing that it could be seen as a policy misstep given the potential for re-emerging price pressures [8].