Inflation concerns push up bond yields1 min read . Updated: 09 Sep 2009, 12:49 AM IST
Inflation concerns push up bond yields
Mumbai: Bond yields rose on Tuesday after India’s central bank governor said inflation was becoming a concern sooner than expected, raising worries it would move to a hawkish monetary stance in the coming months.
“We believe that inflation is becoming a concern sooner than we’d expected earlier and we have to balance the need for growth and price stability," D. Subbarao said in an interview to Reuters in the Swiss city of Basel.
The 10-year benchmark bond yield ended at 7.37%, off an intraday high of 7.39%, and 8 basis points above Monday’s close of 7.29%.
One basis point is one-hundredth of a percentage point. On Friday, the yield rose to 7.5% during trade, its highest since 18 November.
Volume was a normal Rs6,560 crore.
After market hours, the central bank said it would buy back up to Rs6,000 crore worth of bonds on Thursday. It bank sold Rs9,160 crore of state loans on Tuesday.