India's 2036 bond yield falls to 7.0106% as oil dips
India's government bonds had a good day after global oil prices dipped below $100 a barrel, giving everyone a breather from inflation worries.
Since India imports almost all its oil, these price drops really matter.
The benchmark 6.94% 2036 bond yield fell 4 basis points to 7.0106%, but with the Reserve Bank of India (RBI) set for a rates decision in October, keeping them down might not be easy.
RBI sells ₹75,000cr, plans ₹25,000cr
Oil prices fell thanks to some easing geopolitical tensions, which also nudged swap rates down slightly.
Meanwhile, the RBI is actively managing cash flow by selling ₹750 billion in bonds now and planning another ₹250 billion sale soon.
Still, experts like DBS Bank warn that inflation could stay above 5% in the second half of the fiscal year, so there are challenges ahead for both the economy and policymakers.