Oil, dollar inflows blunt impact on Indian bonds from index inclusion snub
Foreign investors net bought bonds under the fully accessible route worth almost $4 billion since the start of June
Indian government bonds experienced a dip on Monday's trading session due to falling oil prices and dollar inflows through the central bank's schemes, despite a delay in their inclusion in a global bond index. The 6.94% 2036 bond yield began at 6.8343% on Friday but fluctuated between 6.83% and 6.89% shortly after opening. Investors had anticipated the inclusion of bonds in the Global Aggregate Index, but Bloomberg Index Services postponed the process, disappointing foreign investors who had net bought bonds worth nearly $4 billion under the fully accessible route since June.
Despite the delay, factors such as oil prices and dollar inflows have provided support to bonds, keeping the benchmark yield around 6.85% after initial volatility. Brent crude prices dropped over 7% following President Trump's decision to avoid striking a fresh deal with Iran. Meanwhile, the Reserve Bank of India received inflows worth almost $41 billion under its June schemes, and a policy decision is expected on Wednesday, where traders are expected to focus on the central bank's interest rate trajectory.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
