Indian Bonds Erase Early Gains as Central Bank Mulls Rate Hikes

Deep News05-21 13:00

Indian government bonds surrendered their early session advances following reports that the Reserve Bank of India is considering measures, including potential interest rate hikes, to stabilize the rupee. Sources indicate the central bank is also planning to increase currency swap operations and attract dollar funds from overseas investors. The yield on India's benchmark 10-year bond, which had initially fallen by 6 basis points, reversed course to rise by 5 basis points to 7.12%. Meanwhile, the yield on the 5-year government bond surged past 7% for the first time since July 2024. The bond market had initially weakened on news that the RBI planned to inject liquidity equivalent to $5 billion via a foreign exchange swap auction.

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