The yield on the Indian 10-year government bond eased to 7.4%, but not far from a 3-year high of 7.6% hit on June 13th, after the country’s retail inflation softened more than expected to 7.04% in May, from 7.79% in the previous month. India’s bond yield has climbed more than 100 basis points this year, tracking a global rise in borrowing costs after larger than expected inflation figures in the US hardened bets of more aggressive monetary tightening. On the domestic front, the Reserve Bank of India also raised the key interest rate by 50 bps in June, after a surprise 40bps off cycle rate-hike in May, tracking most other central banks. However, the central bank’s verbal pledge to support a record USD 183 billion government-borrowing plan hasn’t been backed by actions so far. The monetary authority has not implemented any steps, for instance direct purchases unlike last year, raising fears of even a deeper sell-off in the bond market.
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 June of 2022.
The India Government Bond 10Y is expected to trade at 7.50 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 7.68 in 12 months time.