Govt bond yields hit 3-week high at 7.16% on US rate concerns

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Key Points

One basis point is 0.01 percentage point.Economists expect July CPI inflation - data for which is due in early August to rise past 6%, which is the upper bound of the RBI's tolerance zone for the price gauge...

Mumbai: Government bond yields jumped to a three-week high Friday, pushing up borrowing costs in the broader economy, as concerns over US interest rates remaining at elevated levels and apprehensions over hardening domestic price pressures soured the view on sovereign debt...

Yield on the 10-year benchmark bond settled at 7.16% on Friday, four basis points higher than its previous close and the highest closing level since July 7, Bloomberg data showed..

The selloff in the domestic market came on the heels of a sharp jump in US bond yields after data released after Indian trading hours on Thursday showed unexpectedly strong economic growth in the world's largest economy..

Concerns over a sharp rise in domestic inflation have also eroded appetite for government bonds, as hardening price pressures are seen making a case for the RBI to maintain vigilance on inflation and continue with its stance of withdrawing accommodation..

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