India's 10 year government bond yield highest since April 2024
India's 10-year government bond yield just hit its highest point since April 2024, thanks to a global bond selloff and rising inflation jitters.
With global yields climbing, especially in the US investors are watching closely, as the RBI is now expected to consider a rate hike at its October 7 meeting.
RBI sales, ₹3.5L/cr issuances tighten liquidity
The jump in yields isn't just about global trends. There's also concern over huge upcoming state debt issuances (up to ₹3.5 lakh crore by December) and the RBI's recent moves to sell bonds, which could tighten liquidity further.
As Sreejith Balasubramanian, senior economist at Bandhan Mutual Fund, puts it, "RBI may have to considerably tighten monetary policy in the months ahead, with next week's meeting being live, and deploy measures to absorb excess liquidity."
In short: borrowing may get pricier and money could feel a bit tighter for everyone soon.