RBI policy impact: 10-year gilt yield crosses 8%, rupee falls

Banks have been increasing their lending rates even before the RBI's rate hike this week

The 10-year gilt yield briefly crossed the 8 per cent mark in morning trades, but fell back below Thursday’s close after news that Finance Minister Piyush Goyal had expressed concerns about high yields. 

The rise in yields pushes up costs for everyone. Banks have been increasing their lending rates even before the Reserve Bank of India’s (RBI’s) rate hike this week. The cost of borrowing for corporates, as well as states and the Centre, goes up with every rise in yields.

As interest cost rises, investment activities take a hit. Goyal, according to sources, had discussed steps to bring down yields. Following