India 10Y Yield Remains Sideways

2025-12-05 08:52 By Joshua Ferrer 1 min. read

The yield on India’s 10-year G-Sec hovered around 6.5%, maintaining a sideways trading pattern, as markets assessed the Reserve Bank of India’s first repo rate cut in six months.

The central bank lowered rates by 25 bps to 5.25% after inflation hit record lows and growth stayed firm, a combination policymakers described as a “Goldilocks” backdrop that allowed room to support activity.

While most economists expected the cut, some thought the RBI would hold after the rupee’s slide, though expectations of upcoming Federal Reserve easing may help preserve the rate gap.

The central bank kept its neutral stance and indicated this could be the final cut for now, with future support likely delivered through liquidity operations.

The RBI plans to roll out 1 trillion rupees of bond purchases and a $5 billion FX swap this month to boost liquidity in the banking system.

These operations are expected to offset the cash drain from dollar sales and keep government bond yields from rising.



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