Jobaaj Stories
6th June 2022, Monday: During the first hours, the 10-year bond yield rose by 4 basis points (bp) to hit 7.500%. On the last trading day of the previous week i.e 3rd June 2022, the 10-year bond yield settled at 7.456%.
It was the highest since March 22nd, 2019 when it closed at 7.504%. The hike in the yield is anticipated due to the expectation of the investors for around 50 basis points increase in the rates later this week in an MPC meeting and as well due to global crude oil prices.
Noida toll share jumps 20% in a single day, read more.
It is also to be considered that India imports nearly 85% of its oil needs and oil crude prices leading to a rise in inflation and depreciating the rupee by widening the country's trade and current account deficit. The hike in the inflation rate has made the investors move out of the bonds, thus reducing the value of fixed and long-term bonds.
"The weight of RBI's policy considerations has shifted away from economic support and towards taming inflation, suggesting that we should see a relatively fast pace of rate hikes ahead, And with inflation proving to be quite sticky, the risks around RBI's hike path are likely tilted to the upside.”Eugene Leow and Duncan Tan, strategists at DBS Bank said in a note.
As per the latest poll conducted by Reuters, post the out-of-turn 40 bps rate increase earlier in May showed 14 of 53 economists expect the Reserve Bank of India (RBI) to hike by 35 bps to 4.75% in June, while 20 expect a larger move ranging from 40-75 bps, including 10 who forecast a 50 bps hike.
-by Gautam
This news piece is brought to you in association with jobaaj.com
