Bond yield rises nearly 6 basis points to a 24-month high of 6.52%

This raises the prospects of higher lending rates

The yield on the benchmark 10-year Government of India bond rose nearly 6 basis points (bps) to a 24-month high of around 6.52 per cent on Tuesday. This was the biggest one-day rise in bond yields in the last four months as bond investors asked for higher yields (or interest rates) in view of India's growing fiscal deficit and high inflation. The market closed on Monday with yields of around 6.46 per cent.

One bps is one-hundredth of a per cent.

"There has been upward pressure on bond yields in India for many months now, given the rise in bank credit-to-deposit ratio,