Currently, India funds most of its fiscal deficit, in most years exceeding 95 per cent of requirement, via domestic savings. Banks, Mutual Funds and Small Savings scheme are the biggest investors in IGB. In this, India’s one of the few outliers in the Emerging Markets (EMs) world, with only a few East Asian economies in company in that corner. Most EMs are substantially (some chronically) dependent on foreign savings to fund their deficits. For India, this is made possible by three enabling conditions. First, a deep and sophisticated banking and capital market. Second, high domestic savings rate (though somewhat lower than East Asian levels) that enables our financial markets intermediate these savings into IGB. Lastly, high quality, and sometimes restrictive, regulations by RBI, which enable both efficient intermediation as well as a tight grip on market participants to manage imbalances. RBI’s role as both the banking regulator as well as the banker to the government means it is a rules maker and a market participant at the same time. Ergo, bond prices are marked as much to RBI regulation as they are to market sentiments.