India 10-year bond gives up post-policy gains as oil moves, RBI swap pullback weigh
MUMBAI: Indian government bonds declined for a second straight session on Tuesday, surrendering gains made after the central bank’s policy decision two weeks ago, as elevated oil prices compounded the impact of the early closure of a deposit scheme. The yield on the benchmark 6.94% 2036 bond ended at 6.8269%, after closing at 6.8071% on Monday, up 5 basis points from Monday, its sharpest increase…
Indian government bonds declined for a second consecutive day on Tuesday, erasing recent gains following the central bank's policy decision two weeks ago. The yield on the benchmark 10-year bond fell to 6.8269%, down from the 6.8071% recorded on Monday, marking the sharpest increase in more than a month. The yield on the 6.94% 2036 bond also dropped to 6.8269%, after closing at 6.8071% on Monday.
The early closure of a zero-cost swap facility by the Reserve Bank of India (RBI) a month ahead of schedule, due to better-than-expected inflows from a deposit scheme, has compounded the impact of elevated oil prices on bond yields. India, being the world's third-largest oil importer, is particularly vulnerable to oil price fluctuations, which can exacerbate inflation, the current account deficit, and the government's fiscal situation.
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