Traders in India are once again testing the central bank’s pledge to support the government’s massive borrowings, Bloomberg News reported. The tension is showing in the benchmark 10-year yield that surged past 6% on Thursday, a level seen as a line in the sand for the Reserve Bank of India. Underwriters had to buy almost 70% of government debt put up for auction as a near-record debt-sale plan and concerns over fewer liquidity measures spook traders. “The RBI is trying to fight this battle to keep yields closer to 6%, but there is a humongous supply of bonds, with market filled to the brim,” said Vijay Sharma, executive vice president for fixed-income at PNB Gilts Ltd. “Unless the market has a view that the RBI will keep rates here or bring it down, only then will they will be gung-ho on bonds.” The tussle between bond traders and the central bank for the past year has brought a public rebuke from Governor Shaktikanta Das, a meeting with bankers last month, and canceled auctions. Unlike other central banks, the RBI is seeking to tame borrowing costs without a quantitative easing program or yield-curve control even as Prime Minister Narendra Modi’s administration embarks on a spree of debt sales. Modi wants to borrow 12 trillion rupees ($165 billion) for the fiscal year staring April, a little less than the record issuance set for the current year. To support the program, the RBI will seek to buy more than 3 trillion rupees of debt while capping the benchmark yield at 6%. Read more.