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RBI raises repo rate by 40 bps in surprise move; CRR increased by 50 bps

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Bond yield shoots up; another interest rate hike likely in June

Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India, said he expected repo hikes in June and August policy review meetings too

Topics
Bond Yields | RBI monetary policy | monetary policy committee

Manojit Saha  |  Mumbai 


Bond yields shot up on Wednesday after the Reserve Bank of India (RBI) increased the repo rate by 40 bps to 4.4 per cent by calling an out-of-turn meeting of the monetary policy committee (MPC).

The yield on the 10-year government bond jumped 26 bps to close the day at 7.38 per cent while yields on the 3-year and 5-year bonds went up by 39 bps and 31 bps, respectively. Yields could go up further as the central bank is seen to hike interest rates again in the scheduled policy review meeting in June. “With inflation likely to remain above 6 per cent for H1-FY23 and risks of it ...

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First Published: Thu, May 05 2022. 01:16 IST