India’s 10-year benchmark bond yield climbs to 7.18% p.a in April 2022

The yield for the longer-term bonds is slated to rise even further as inflation continues to harden
The yield for the longer-term bonds is slated to rise even further as inflation continues to harden
The yield for the longer-term bonds is slated to rise even further as inflation continues to harden

The 10-year sovereign grew sharply in April, to 7.18% p.a, by 34bps, compared to the previous month. The Russia-Ukraine war has added to the supply disruptions globally, exacerbating inflation levels. India has also joined the list of the countries that have tightened monetary policy as the policy rate was revised upwards by 40bps.

 The yield for the longer-term bonds is slated to rise even further as inflation continues to harden

The yield for the longer-term bonds is slated to rise even further as inflation continues to harden, which could mean greater subsidies on part of the government. In addition, the reduction in excise duties on fuel may potentially translate into a higher fiscal deficit for the country, which would, in turn, lead to greater borrowing, aiding the upward trajectory of the bond yields. 

Further data and analysis on India’s economy are available on the CEIC India Economy in a Snapshot – Q2 2022 report.

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24th May 2022 India’s 10-year benchmark bond yield climbs to 7.18% p.a in April 2022