India 10-Year Bond Yield Climbs as Crude Oil Surge Dampens Ceasefire Hopes
Oil price surge and global uncertainty push yields higher; RBI maintains status quo on interest rates
India, Apr 09 : India’s 10 year bond yield opened on a firmer note on April 9, reflecting a sharp rebound in global crude oil prices amid diminishing hopes of a ceasefire between the United States and Iran.
In early trade at 9:10 am, the benchmark yield climbed to 6.931 percent, up by 3 basis points compared to its previous close of 6.898 percent.
The upward movement in yields followed a more than 2 percent jump in crude oil prices during Asian trading hours. The recovery comes after a steep decline earlier this week, with supply concerns resurfacing as the Strait of Hormuz continues to face disruptions. Market participants are also closely monitoring upcoming US economic indicators, including weekly jobless claims and personal consumption expenditure data, a key inflation measure tracked by the Federal Reserve.
A day earlier, bond yields had recorded a significant decline of 15 basis points to around 6.90 percent, marking the sharpest single day drop since May 2022. The fall was driven by easing geopolitical tensions and a corresponding dip in oil prices.
On the domestic front, the Reserve Bank of India kept policy rates unchanged. The Monetary Policy Committee unanimously decided to hold the repo rate at 5.25 percent, aligning with market expectations.
RBI Governor Sanjay Malhotra stated that recent interventions in the currency market are temporary in nature. His remarks come after the central bank introduced measures such as a cap on banks’ onshore currency positions and restrictions on non-deliverable forward contracts, aimed at stabilising the foreign exchange market.
