India's 2036 bond yield jumps to 6.8407% as oil rises
Indian government bonds took a hit on Tuesday after oil prices climbed above $90 a barrel for the first time in weeks.
Yields on key bonds rose, with the benchmark 2036 bond jumping to 6.8407%.
The drop got steeper when the Reserve Bank of India (RBI) surprised markets by ending its liquidity support program earlier than expected.
RBI ends 0 cost swap early
The RBI said it will close its zero-cost swap facility a month early, a program that pulled in more than $50 billion from nonresident Indians, a month ahead of schedule, citing strong inflows and concerns about too much cash in the system.
Now, without that extra support, Indian bonds are more exposed to global oil price swings and global rates.
Investors are staying cautious as they watch what happens next with both oil prices and RBI policy.