Fed hike, RBI moves hand India bonds a fifth weekly loss
· Business · Economic Times, LiveMint
Indian government bonds fell for a fifth consecutive week on Friday, with the benchmark 6.94% 2036 bond yield closing at 7.0686%. The Federal Reserve's 25-basis-point rate hike and the Reserve Bank of India's bond sales drained liquidity and emboldened bearish market positioning. Global yields reached multi-decade peaks, and the US 10-year Treasury yield hit 5.03%, the highest since 2008, prompting foreign investor outflows. Shriram Life Insurance's CIO noted increased likelihood of an RBI rate hike in October to maintain India's interest rate differential with the US.
Why it matters
Rising bond yields will increase borrowing costs for the government and corporations, potentially tightening credit conditions and affecting fiscal deficit management while signaling RBI's cautious policy stance amid global volatility.
Read the original report — Economic Times
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