G-sec yield hits over 3-year high of 7.44% as oil back to $110

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The economy’s benchmark 10-year bond yields last hit 7.44% in March 10, 2023, when consumer prices (CPI inflation) increased at a rate of 5.66%.

By Ashokamithran T

Updated - October 21, 2026 at 07:58 PM.

Bond yields have been on an upward trajectory for the better part of the year. Yields on the paper has hardened 40 basis points in the last month alone and by 85 basis points since January 1, 2026, before the Iran-US tensions intensified. | Photo Credit: istock.com

The benchmark bond yields hit a more than three year high of 7.44 per cent as brent crude futures touched $110 a bbl as outlook on West Asia turns uncertain again.

The economy’s benchmark 10-year bond yields last hit 7.44 per cent in March 10 2023 , when consumer prices increased at a rate of 5.66 per cent.

Bond yields have been on an upward trajectory for the better part of the year. Yields on the paper has hardened 40 basis points in the last month alone and by 85 basis points since January 1 2026, before the Iran-US tensions intensified.

The oil prices appreciated 1.74 per cent to $110 a barrel in the past day. As of the trend in the past week, the oil prices have gone back to levels last seen in May 2026, when the uncertainties of a deal between US and Iran were uncertain and both the sides indulged in attacks. The rise to $110 a bbl has been relatively more gradual this time.

Treasury heads of banks had already seen the increase to 7.4 per cent and said that bond yields may go as high as 7.5 per cent at the current oil price levels, and that these levels have to dip an stay there sustainably for bond yields to ease.

The rupee-dollar pair too appreciated about 53 paise at open but closed at ₹94.3.

While rupee appreciated rupee because of Reserve Bank of India’s (RBI) measures, the crude price rise remains relentless, said Gopal Tripathi, who heads Treasury and Capital Markets at Jana Small Finance Bank.

Markets will test a bond yields of 7.5 per cent levels in the coming days, treasury heads said. “7.5 per cent is the first target. Foreign Institutional Investors (FIIs) are not back yet and trade deal is not signed,” said Anshul Chandak, who heads Treasury at RBL Bank, saying that that the uncertainty kept the bond yields close to the near-term target.

Published on October 21, 2026

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