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Bond yields spike as rupee falls further to 71.96/$

Bond yields spike as rupee falls further to 71.96/$

Bond yields spike as rupee falls further to 71.96/$
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By Aastha Agnihotri  Sept 5, 2018 2:31:22 PM IST (Updated)

India's 10-year bond yield spiked on Wednesday, tracking further weakness in rupee.

India's 10-year bond yield spiked on Wednesday, tracking further weakness in rupee, which touched a fresh record low of 71.93 on the back of stronger dollar.

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With investors avoiding emerging market currencies due to simmering global trade conflicts, bond prices and local currency have taken a slump in the last few days.
Bond yields reached a four-year high surpassing the psychologically important 8 percent level, while the rupee has breached the 71 mark for the first time ever.
"One would expect some consolidation after smart sell off but we need stability in rupee and decline in crude prices to get some calm," Abhishek Upadhyay, senior economist at ICICI Securities Primary Dealership told CNBC-TV18.
“So, as long as those variable don’t improve, I would not preclude further pick up in yields yet,” he said.
At 12:55 PM, yields on the 10-year government bonds stood at 8.10 percent, from its previous close of 8.063 percent. Bond yields and prices move in opposite directions.
The dollar index, which measures the greenback against a basket of six currencies, was a touch lower at 95.360 but in close reach of a two-week high of 95.737 set on Tuesday.
The rupee was trading at 71.70 a dollar, down 18 paise, from its Tuesday’s close of 71.57. The home currency opened at 71.45 and touched a high and a low of 71.37 and 71.79 a dollar, respectively.
So far this year, the rupee has weakened 10.6 percent, while foreign investors have sold $488.60 million and $5.75 billion in equity and debt markets, respectively.
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