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India Bond Yields Steady Post August Retail Inflation Data

Tuesday,   14-Sep-2021   01:52 PM (IST)

Indian federal government bond yields were little changed in the afternoon session, after inflation eased to a four-month low in August, while traders awaited the outcome of today’s state debt sale. The benchmark 6.10% bond maturing in 2031 was at 99.29 rupees, yielding 6.20%, at 1:00 p.m. in Mumbai, against 99.32 rupees and 6.19% yield yesterday. The Indian rupee was at 73.59 to the dollar against 73.67 yesterday. Indian states are selling 138.47 billion rupees of bonds today. India’s retail inflation was at 5.30% in August, the slowest pace since April, and within the central bank’s tolerance band for the second month in a row, data released after market hours yesterday showed. The print eased for the third straight month and lagged the 5.60% median forecast in a Reuters survey of economists. Wholesale inflation rate in August snapped a two-month easing trend, driven by costlier manufactured items. Wholesale prices rose 11.39% on year in August, government data showed today. The print outpaced a median forecast of a 10.75% annual expansion, according to a Reuters poll of economists. It was also faster than the previous month’s 11.16% rise. India’s central bank has kept the key policy rate at a record low since last year and has committed to stay accommodative for as long as necessary to help sustain growth in the Covid-hit economy. The Monetary Policy Committee’s next decision is due on Oct. 8. Meanwhile, the benchmark Brent crude oil contract was 0.57% higher at $73.93 per barrel on signs that yet another storm could possibly affect Texas after Hurricane Ida impacted production recently. India imports about 85% of its crude oil requirements.