Bond yields rise ahead of cenbank chief’s address

MUMBAI: India’s benchmark 10-year bond yield rose to its highest in more than two weeks on Wednesday afternoon as investors speculated on the possibility of an off-cycle rate increase by the Reserve Bank of India. The central bank said in a tweet, governor Shaktikanta Das, will be making a statement at 2 p.m. local time on Wednesday.

The benchmark 10-year bond yield was trading at 7.19% by 0743 GMT, after having touched 7.21%, its highest since April 18. The yield closed at 7.12% on Monday. Financial markets were closed on Tuesday.

“There is a lot of speculation. A rate increase will be very unusual considering the central bank has said they don’t want to shock markets but clearly there are expectations for a hike being priced in,” a senior trader at a foreign bank said. The partially convertible rupee was trading at 76.44/45 per dollar compared with its close of 76.5150. Both the main share indexes and were down around 1.1%.