Why India's 10-year bond yield is at its highest since January 14, 2025
India's 10-year government bond yield shot up to 6.82% on Monday, its highest in over a year.
This means borrowing money just got pricier for the government, businesses, and even people taking out home loans.
How does this affect you?
When borrowing costs go up, it can slow down spending and investment across the board.
So, whether you're thinking about a business loan or a home mortgage, expect things to get a bit more expensive.
Soaring oil prices
The main culprit is soaring crude oil prices: Brent crude is up nearly 50% since late February due to Middle East tensions and worries about energy supply from Iran.
Higher oil prices often lead to inflation and make imports costlier for India.
What about foreign investments?
Foreign institutional investors were net buyers in January and February but turned net sellers of government bonds in March.
As Arete Capital's Mataprasad Pandey said, "These factors not only dampen expectations of a rate cut but raise the possibility of a rate hike if geopolitical tensions persist for long."