India 10Y Yield Pauses Decline

2026-07-03 07:34 By Mariene Camarillo 1 min. read

The yield on India’s 10-year G-Sec rose to 6.74%, pausing recent losses after slipping to a fifteen-week low, as investors continued to assess the outlook for monetary policy.

Over the past three months, Indian government bond yields have risen amid expectations that the Reserve Bank of India is nearing a shift toward tighter policy, with inflation concerns fueled by the Iran war-related energy shock.

The benchmark 10-year yield climbed 34 basis points between March and May.

The sharper rise in shorter-dated yields has prompted foreign investors to rotate into bonds with maturities of less than five years, which accounted for more than two-thirds of the ten most-purchased securities during March-May, as they offered more attractive risk-adjusted carry with lower duration risk.

Meanwhile, overseas investors bought INR 221 billion of government bonds in January-February, turned record net sellers of INR 177 billion in March, before returning as net buyers in April and May.



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India 10Y Yield Pauses Decline
The yield on India’s 10-year G-Sec rose to 6.74%, pausing recent losses after slipping to a fifteen-week low, as investors continued to assess the outlook for monetary policy. Over the past three months, Indian government bond yields have risen amid expectations that the Reserve Bank of India is nearing a shift toward tighter policy, with inflation concerns fueled by the Iran war-related energy shock. The benchmark 10-year yield climbed 34 basis points between March and May. The sharper rise in shorter-dated yields has prompted foreign investors to rotate into bonds with maturities of less than five years, which accounted for more than two-thirds of the ten most-purchased securities during March-May, as they offered more attractive risk-adjusted carry with lower duration risk. Meanwhile, overseas investors bought INR 221 billion of government bonds in January-February, turned record net sellers of INR 177 billion in March, before returning as net buyers in April and May.
2026-07-03
India 10Y Yield Slips on Foreign Inflows
The yield on India’s 10-year G-Sec fell to around 6.72%, hovering near fifteen-week lows as easing crude oil prices and sustained foreign buying outweighed rising US Treasury yields. Foreign investors have been net buyers of INR 324 billion in Indian government bonds since June, supported by tax relief measures, a steadier rupee, and expectations that India could be included in Bloomberg's Global Aggregate Index, with a decision expected later this month. Goldman Sachs also forecasts foreign inflows into Indian government bonds to increase by $10 billion in 2026. Meanwhile, Brent crude hovered near $70 per barrel after the US and Iran concluded another round of peace talks, easing inflation concerns. Investors also welcomed remarks from Reserve Bank of India Governor Sanjay Malhotra that India is unlikely to raise its inflation target, although traders remained cautious ahead of Friday's INR 340 billion auction of benchmark 10-year government bonds.
2026-07-01
India 10Y Yield Hits 15-Week Low
The yield on India’s 10-year G-Sec fell to around 6.71%, extending declines to a fifteen-week low as improved domestic liquidity and easing short-term funding costs boosted demand for government bonds. Recent Reserve Bank of India measures to attract foreign currency inflows are expected to inject billions of dollars into the banking system, reducing banks' reliance on higher-cost certificates of deposit and lowering funding costs. CD yields have fallen by up to 60 basis points over the past three weeks. Meanwhile, the spread between three-month Treasury bill yields and comparable state-run bank CDs narrowed to 140 basis points from over 200 basis points three months ago. Softer global yields also supported the bond market, with the US 10-year Treasury yield edging down to 4.37% ahead of Thursday's US June nonfarm payrolls report. Lower oil prices further improved sentiment, with Brent crude hovering near $72.50 per barrel, easing concerns over imported inflation.
2026-06-30