India 10-year bond yield tops 7.35% as RBI's liquidity clamp down hurts

India's 10-year bond yield has surpassed 7.35% due to the Reserve Bank of India's efforts to reduce liquidity in the market. This move is aimed at controlling inflation, but it has had the opposite effect, causing bond prices to drop and yields to rise. The RBI's actions are hurting investors, who are now facing higher borrowing costs. This development is significant for the Indian economy, as it may impact the country's growth prospects and inflation rates.

Why it matters

The RBI's measures are reducing liquidity in the market. This could lead to higher short-term interest rates and make short-term debt more attractive.

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