India's 10-year yield 7.21% amid oil and RBI rate talk
India's 10-year government bond yield just hit 7.21%, its highest point in two and a half years.
What's behind the spike? Rising oil prices and talk that the Reserve Bank of India (RBI) might hike interest rates soon.
Some experts think yields could climb even higher, possibly reaching 7.50%, especially if the RBI goes ahead with a rate hike.
Govt borrowing could push yields 7.50%
The government just raised ₹33,000 crore in debt, and state governments are set to add another ₹3.3-3.5 lakh crore in bonds next week.
That's a lot hitting the market at once, which could overwhelm demand and push yields up further.
Rajeev Pawar, head of treasury at Ujjivan Small Finance Bank, says we might see yields peak around 7.50% if the RBI follows through with its plans.
Bond trading quiet for Gandhi Jayanti
Bond markets will take a break on Friday for Gandhi Jayanti before everyone waits to see what RBI does next week, so expect trading to be quiet until then.