India 10Y Yield Eases from 2-Month High

2025-11-03 07:48 By Joshua Ferrer 1 min. read

The yield on India’s 10-year G-Sec dropped around 6.53% from a two-month high of 6.59% touched in October 31, after the Reserve Bank cancelled a 7-year bond auction.

The central bank rejected bids worth 110 billion rupees for the 6.28% 2032 bond last week, signaling its discomfort with higher yields.

In addition, most market participants had been expecting a rate cut by the RBI in December, with the market still pricing in about 20bps of easing over the next few months amid a benign inflation outlook.

Meanwhile, the downward momentum was capped by a weaker rupee, tight liquidity, and subdued demand.

The rupee hovered near its record low, prompting RBI intervention to defend the currency, which in turn drained liquidity from the banking system.

The tighter liquidity limited banks’ bond purchases, adding upside on yields.

Separately, foreign inflows into Indian government bonds remain strong, totaling $1 billion in October.

Markets will be closed on Wednesday due to a local holiday.



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