Oil and US yields push India 10-year yield past 7%
India's 10-year government bond yield just crossed the 7% mark for the first time in more than three months, thanks to rising global oil prices and higher US Treasury yields.
Brent crude shot past $108 a barrel this week, mostly due to worries about supply from the Middle East.
With US bond yields also climbing, investors are getting nervous about inflation and are selling Indian bonds.
RBI signals bond sales and swaps
The Reserve Bank of India (RBI) is adding to the uncertainty by hinting at moves like bond sales and foreign exchange swaps to deal with extra cash in the system.
For the first time in a year, RBI even partially canceled an auction of shorter-dated government bonds, showing concern over borrowing costs.
Now everyone's waiting for fresh inflation numbers from India and the US and what the Federal Reserve decides next to see where things go from here.