India 10Y Yield Pulls Back After New Bond Auction

2025-10-03 08:42 By Joshua Ferrer 1 min. read

The yield on India’s 10-year G-Sec fell toward 6.5% in October, pulling back from a four-week high touched in late September, as investors sold the note after the auction of a new 10-year bond, while dovish guidance from the Reserve Bank of India kept yields subdued.

The issuance of the fresh bond, which raised 320 billion rupees, followed New Delhi’s decision to increase the share of such securities in its October–March borrowing plan.

The government sold the note at a cut-off yield of 6.48%, broadly in line with estimates.

Meanwhile, the RBI kept its policy rate at 5.50% at its September meeting, noting that subdued inflation opens policy space to support growth.

Markets largely expected the hold, though some economists see external headwinds creating room for a 25-bp cut in December.

The central bank also raised its FY2026 GDP forecast to 6.8% and lowered inflation expectations to 2.6%, with Governor Malhotra warning that tariffs and trade policies pose risks to external demand.



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