India's interest rate carnage

The past three weeks have witnessed a seismic shift in the direction of Indian interest rates. This spells doom for the local corporate debt market.

India's corporate bond market hasn'táhad a shot in the arm recently it's had a shot in the head.

The debt market û one of the most vibrant in Asia and the third largest afteráJapan and Korea û has been wounded by rising interest rates in the past three weeks. With poor inflation numbers and a sharp rise in US rates, the direction of interest rates has suddenly gone skywards.

In recent months, the 10-year benchmark government bond has fallen dramatically, to as low as 10.26%. A total borrowing programme for the year of Rs1.1 trillion $24.6 billionálooked good for the government. However, in the past three weeks, the 10-year yield...

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