The yield on the 10-year government bonds in India edged down to 7.2%, tracking a general fall in borrowing costs as investors sought to safe government assets amid concerns that aggressive monetary tightening by major central banks could tip global economies into a recession. On the domestic front, the RBI is expected to raise rates further in August as domestic inflation is still way above the central bank's 2-6% target range despite easing to around 7% in June. The RBI raised the key interest rate by 90 bps so far this year, to tame the 8-year high inflation, after holding the repo rate at a record low of 4% since May 2020. In addition, the monetary authority liberalized rules for foreigners to invest in local-currency bonds, days after the government raised import duty on gold and exports levies on fuels to tame the fast widening current account gap.
Historically, the India Government Bond 10Y reached an all time high of 14.76 in April of 1996. India Government Bond 10Y - data, forecasts, historical chart - was last updated on August of 2022.
The India Government Bond 10Y is expected to trade at 7.36 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 7.54 in 12 months time.