Inflation, rates hikes may push yields up further: DSP Investment's Yadav

In a Q&A, the head of the fixed income vertical at the firm says the 10-year benchmark rising above 7% is normal and not a sign of instability

After the spike in inflation and rate hikes by other central banks, the Reserve Bank of India's (RBI’s) rate hike was fait accompli, says Sandeep Yadav, Head–Fixed Income, DSP Investment Managers. In an interview with Ashley Coutinho, he says the quantum and duration of rate hikes would be driven by the inflation trajectory going forward. Edited excerpts:

What do you make of the recent announcement by the RBI to raise the repo rate by 40 bps and CRR by 0.5 per cent?

After the spike in inflation and rate hikes by other central banks, RBI’s rate hike was fait accompli.