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10-year bond yields climb back to 6% as Reserve Bank of India goes silent

The central bank may be trying to increase the attraction of sovereign debt by letting yields rise, according to PNB Gilts Ltd

RBI
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Indian bonds are offering negative real rates, after a surge in inflation brought on by a supply crunch due to rolling lockdowns.

Kartik Goyal | Bloomberg
A conspicuous silence from the Reserve Bank of India regarding support for the nation’s bonds has left traders wondering whether the recent gains in yields is a new normal.

The central bank may be trying to increase the attraction of sovereign debt by letting yields rise, according to PNB Gilts Ltd. The benchmark 10-year bond yield advanced to 5.97% on Wednesday, the highest since May.


 
If that’s true, the RBI would be treading a delicate balance as a prolonged absence from the market could raise questions over support for the government’s record Rs 12-trillion ($160 billion) debt

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First Published: Aug 20 2020 | 8:51 AM IST

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