'Current yields will lead to mark-to-market losses for banks'

Rate hikes will be something which we can expect when the borrowing programme comes down and economic growth prospects are strong, Nagarjan said

Rising bond yields over the past few days amid a surge in commodity prices have created a flutter across global financial markets, including India. MURTHY NAGARAJAN, head of fixed Income at Tata Mutual Fund tells Puneet Wadhwa in an interview that markets back home have been spooked due to announcement of variable repo rate auctions by RBI to suck out excess liquidity. Edited excerpts:

Has the sharp spike in bond yields taken markets by surprise?

Commodity prices have gone up and global yields have moved due to expectation of higher inflation going ahead. The Indian government has announced additional borrowing