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Charts & Analysis

Gilt yields jump up suddenly, to 5.75%

Gilt yields have gone berserk – up to 5.75% today. ET says its because the government is borrowing 50,000 cr..

But come on. 50,000 cr. is 1.25% of GDP. This is not a reason for bonds to lose nearly 4 rupees – or 3% – of their price. There has to be some other explanation, my idea being profit booking in general.

Let’s see – prices come first, reasons come later. I still see rates at 4% later this year, so I’m holding.

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