MUMBAI: Indian government bond yields slipped on Wednesday, tracking a decline in US peers, as market sentiments remained bullish ahead of the domestic central bank’s policy minutes release.
The yield on the benchmark 10-year note was at 6.3099% as of 10:30 a.m. IST.
It ended Tuesday at 6.3201%, hovering near its lowest since November 9, 2021. Yields fall when prices rise.
Traders are awaiting the minutes of the Reserve Bank of India’s (RBI) last policy meeting, due after market hours, to assess the future rate trajectory.
Indian bond yields rise on RBI’s revised liquidity norms
The RBI slashed its key policy rate by 25 basis points (bps) and revised its stance to “accommodative” at its meeting this month.
The benchmark yields have dropped more than 25 bps so far in April and will test a key level of 6.25% this month, traders said.
“The drop in US yield and easing liquidity continue to drive bond yields lower and traders will now wait for the policy minutes to ascertain the central bank’s thinking on rates,” a trader with a state-run bank said.
The local bond yields are tracking the drop in US peers, which declined in Asian hours, as US bonds benefited from some safe-haven demand amid fears of a tariff-led economic slowdown.
The 10-year US yields were last at 4.35% in Asian hours, about four basis points lower than previous close on Tuesday.
The underlying sentiment has been positive amid consistent liquidity injections by the RBI, lower inflation rate and rising rate cut bets to boost a sluggish economy.
The RBI has injected 6 trillion rupees ($70.31 billion) of durable liquidity into the banking system in the first four months of 2025. It is also set to buy bonds worth another 200 billion rupees next week.
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