Bond Yields Touch 18-Month High, Oil Prices Pull Rupee Down
NDTV
Bond yields hit their highest levels in 18 months while rupee fell to its lowest level since July 2020 as rising oil prices may impact inflation
Indian bond yields hit their highest levels in nearly 18 months while the rupee fell to its lowest level since July 2020 as the sharp rise in global oil prices raised concerns about its impact on domestic inflation.
India imports 80 per cent of its oil needs and high prices result in increased imported inflation and have a spiralling impact on the prices across other sectors.
The Reserve Bank of India at its policy review on Friday lowered its full year inflation projection to 5.3 per cent from 5.7 per cent but sounded cautious about the impact of high global crude and other commodity prices on inflation.
"The rally in crude is ongoing and until we see some respite there, rupee and bonds will remain under pressure. It needs to be seen if the RBI comes in to protect the rupee or not," a senior dealer with a private bank said.
