MUMBAI – Indian bonds and the rupee slumped on Monday as emerging marketassets came under renewed pressure amid the spectre of a rising dollar,higher crude oil prices and escalating global trade tensions.

The Reserve Bank of India (RBI) and its peers in other emerging economieshave been forced to defend their currencies recently in the wake of aconfluence of dollar-supportive events.

However, the RBI wasn’t seen actively intervening in the foreign exchangemarkets as it did on Friday, traders said.

The 10-year benchmark bond yield rose to 8.12 percent, its highest sinceNov. 28, 2014 as a rise in global crude oil prices added to inflationconcerns.

The rupee also touched a lifetime low of 72.4450 to the dollar on Mondaypressured by solid support for the dollar thanks to strong U.S. jobs dataon Friday, which reinforced expectations of more rate hikes by the FederalReserve.

The 10-year bond had ended at 8.03 percent on Friday and the rupee at 71.73to the dollar.

Heightened fears that Washington will slap fresh trade tariffs on Chinaalso saw investors seek safety in the dollar and pull out of emergingmarket currencies.

High oil prices were a spoiler for both the rupee and bonds. India importsmore than two-thirds of its crude requirement and any rise in global pricesimpacts not only pushes up dollar demand by importers but also raisesinflation concerns back home.

The RBI has raised its policy repo rate in two successive meetings by atotal of 50 basis points as it aims to contain inflation to 4 percent inthe medium term. The headline consumer inflation rose 4.17 percent in Julyfrom a year earlier and is expected to pick up momentum on higher crudeprices and the weakening rupee.

Oil prices rose as U.S. drilling for new production stalled and as themarket eyed tighter conditions once Washington’s sanctions against Iran’scrude exports kick in from November.- Agencies