Rupee Bond Yields Poised to Rise Above Inflation: India Credit

Yields on India’s 10-year government bonds are poised to rise above the inflation rate for the first time since January as the central bank tames prices.

Inflation-adjusted yields ended last week at negative 0.57 percent, compared with minus 3.1 percent at the end of May, as the benchmark wholesale price index moderated to 8.62 percent from 10.6 percent. The Reserve Bank of India estimates the pace of price increases will slow to 6 percent by the end of the current fiscal year in March.