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India Bonds, Stocks Tumble as RBI Raises Rates in Emergency Meet

The yield on the benchmark 10-year bond rose as much as 30 basis points to 7.42%, its highest since 2019, after the decision.

Indian bonds tumbled along with stocks after the monetary authority raised its key rate in an emergency move amid rising inflationary pressures and ahead of a Federal Reserve decision.

The yield on the benchmark 10-year bond rose as much as 30 basis points to 7.42%, its highest since 2019, after the decision. Stocks fell to a two-month low, while the rupee jumped.

India Bonds, Stocks Tumble as RBI Raises Rates in Emergency Meet

The Reserve Bank of India raised its repurchase rate by 40 basis points to 4.40%, Governor Shaktikanta Das said in a statement, citing the need to keep inflationary pressures in check. It also raised the cash reserve ratio by 50 basis points. 

RBI’s move comes ahead of a Federal Reserve decision later in the session where the U.S. is expected to raise rates by 50 basis points.

©2022 Bloomberg L.P.