Indian bond yields hit their highest levels in nearly 18 months while the rupee fell to its lowest level since July 2020 as the sharp rise in global oil prices raised concerns about its impact on domestic inflation.
India imports 80% of its oil needs and high prices result in increased imported inflation and have a spiralling impact on the prices across other sectors.
The Reserve Bank of India at its policy review on Friday lowered its full year inflation projection to 5.3% from 5.7% but sounded cautious about the impact of high global crude and other commodity prices on inflation.