RBI will take measures to ease rising bond yields: FM

RBI will take measures to ease rising bond yields: FM
Worried about the rising bond yields in the economy, the Finance Minister P Chidambaram on Tuesday said that Reserve Bank of India (RBI) will take measures to ease the pressure on bonds amid volatile rupee, rising inflation and high interest rates.

Addressing media at the launch of Bhartiya Mahila Bank, Chidambaram said "We hope that with some measures the RBI will take, and when the next set of inflation figures come, if food inflation moderates, it's possible that G-sec rates will go down."

Yields have risen sharply after RBI raised the repo rate for the second consecutive month in October. On Tuesday, November 19, 2013, yields were at 9 per cent level. The 7.16% 10-year bond's yield spiked nearly 175 basis points to 9 per cent in November from 7.25 per cent in June this year.

Rising bond yields have raised concerns that banks may raise the interest rates soon which, if happens, will be a huge blow to the investments.

Dion Global Solutions Ltd.

Story first published: Wednesday, November 20, 2013, 9:12 [IST]
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