10-year bond yield closes at 16-month high
The benchmark yield closed at a 16-month high of 7.17 per cent on Monday, with traders consolidating their positions ahead of the release of the consumer price index (CPI) inflation data on Tuesday. The 10-year yield closed eight basis points (bps) higher on Monday compared with Friday’s closing level — recording the highest single-day surge since September.
Expectation of a rise in the CPI inflation in November and uncertainty over the fiscal deficit have kept yields high over the last few weeks, bond dealers said. In its monetary policy, the RBI indicated that moderation in inflation observed in the first quarter of this fiscal has reversed, and there is a risk that this upward trajectory may continue in the near-term. RBI also said the impact of house rent allowance (HRA) by the Central government is expected to peak in December and the rise in international crude oil prices is likely to sustain. FE
For all the latest Business News, download Indian Express App