Corporate7-8% yield not dangerous: Chakrabarty
Current market fluctuations in bonds yields were not dangerous, and a 10-year yield of 7-8 per cent was not uncomfortable, Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty said today.
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“Yields have not heated up that they need to be cooled down. Current bond yields are market fluctuations,” he said on the sidelines of a seminar here.
“Something between 7-8 per cent for 10-year is not uncomfortable, uncommon.”
When asked about the current bond market scenario, Chakrabarty said it was reflective of expectations that yields and interest rate were to go up. On inflation, Chakrabarty said policy-makers need to be worried about spill over of food inflation.
“They (policy-makers) need to be worried about all adverse things, so that they can take corrective measure to remove them,” he said.
On being asked about possible actions to control inflation he said “central bank had the tools. But, monetary tools were not the only tool and might not be always effective.”