The RBI's 25bp hike, with inflation seen at 5.8%, hardens the 10-year G-sec yield even as its liquidity drain draws bids far below target.

Two central banks are tightening into an inflation problem they have not solved. The RBI raised its policy rate by 25bp and guided inflation to average 5.8% over the next three quarters, while Greece's headline CPI accelerated to 5% from 1.9% a year earlier — the same constraint on rate cuts that sets the refinancing cost of Greece's public debt. In India the transmission is already visible: the RBI's 3-day variable rate reverse repo absorbed only a fraction of its notified size, leaving the overnight rate pinned near the floor and the drain's grip on the money market weaker than the headline implies. Egypt's disinflation is slowing rather than stalling: monthly headline CPI accelerated in September after an essentially flat August, even as the annual rate eased further into the low teens. Serbia's dinarisation is advancing on the liability side while retreating on the sovereign's own books, so the record share of dinar placements sits alongside a thinner dinar yield curve.