India bonds sink deeper on RBI commentary, inflation concerns

India's government bonds have taken a hit, with the 10-year yield reaching its highest level since March 2023. This decline is largely due to comments from Reserve Bank of India Governor Sanjay Malhotra, who expressed concerns about financial stability. The rise in wholesale inflation in September has also sparked worries about future monetary policy changes, which could further impact bond prices. As a result, investors are becoming increasingly cautious, leading to a decrease in demand for Indian bonds.

Why it matters

The RBI commentary and inflation concerns are causing losses in Indian government bonds. This is leading to a rise in the 10-year yield, which is now at its highest since March 2023.

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