The spread of the 10-year government bond yield over the repo rate touched nearly 100 basis points on Tuesday. At 6.49%, the yield also hit the highest level since April. This was despite steady global yields, subdued crude prices, softest inflation in eight years, and ebbing overnight rate volatility.But the explanation lies not in external shocks. It lies in the Reserve Bank of India’s signalling, which convinced markets that the central bank is closed for more rate cuts.
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