Rising crude prices drive up bond yield, threaten to derail fiscal maths

High oil prices also feed into inflation, necessitating the central bank to be more hawkish in its monetary policy than it so far it has conducted itself

The 10-year bond yield rose sharply to close at 6.64 per cent on Monday, from its previous close of 6.58 per cent, as high oil prices threatened to derail the fiscal math, necessitating potentially higher or out-of-turn borrowings. This yield is the highest since January 22, 2020.

Brent crude oil opened at $86.15 a barrel on Monday and rose to a five-year high of $86.71 during the session, according to Bloomberg data.

This means more expensive crude oil for India, which meets around 85 per cent of its domestic requirement through imports. The Indian basket of crude oil traded at $84.54 a