India's 10-year bond yield climbs to 7.44% as oil prices push up inflation fears
India's 10-year yield hit a three-and-a-half-year high while the RBI rejected all bids at a T-bill auction, according to Moody's.
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what happened
According to Moody's, yields on India's 10-year benchmark bond rose 5 basis points to close at 7.44%, up from 7.39% the previous day. CCIL data showed this is a three-and-a-half-year high. The rise is tied to expensive oil: Brent stayed above $110 a barrel after nearing $112 on Tuesday, its highest in five months.
The Reserve Bank of India also rejected all bids at a treasury bill auction that aimed to raise 23,000 crore rupees. Traders said cutoff yields likely came in above the central bank's comfort level, and banks bid at yields at least 15 basis points higher than a week earlier. The last time the RBI cancelled a T-bill auction was in early June.
why it matters
India is a net importer of oil, so expensive crude raises inflation risks and puts pressure on the rupee and local bonds. Traders expect the RBI could hike by 50 basis points in December if the pressure persists.
market impact
India bonds and rupee: pricier oil lifts inflation fears and pressures local government debt
tags
instruments
sources
- Bond Yield Rises to 7.44% on Higher Oil Prices, Global Cues — Moody's, 22 October 2026 at 04:14 UTC
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