- In August policy, RBI increased its policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points to 5.40% with immediate effect.
India’s 10-year treasury yield clocked the highest single-session rise in three months after the Reserve Bank of India (RBI) hiked the repo rate by 50 basis points on Friday. This would be the third consecutive hike by RBI to tame inflation which is above its comfort zone for the sixth straight month. Other bonds have picked up as well. Markets welcomed RBI’s rate hike move including a rise in bond yields. However, going forward, bond markets are likely to focus on incremental g-sec supply and take cues from global bond yields.
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