MUMBAI: Indian government bond yields are expected to open lower on Wednesday, extending declines from the previous session, as traders position themselves ahead of the central bank’s monetary policy decision this week.
The yield on the benchmark 10-year bond is expected to move between 6.18% and 6.22%, a trader with a private bank said, compared with the previous close of 6.2022%.
The five-year 6.75% 2029 bond yield ended at 5.8440%.
“There is some fresh position building from traders as we are moving closer towards the policy date, as some have started to factor in that there would be something more just than a token 25 basis point rate cut, which is already factored in,” the trader said.
The Reserve Bank of India’s policy decision is due on Friday and the authority is widely expected to cut interest rates by 25 basis points for a third consecutive time.
India bond yields resume decline as all eyes on RBI decision this week
The central bank has lowered policy rates by 50 basis points in 2025 and has infused $100 billion into the banking system during the December-May period.
While most expect a 25 bps rate cut, the State Bank of India argues the RBI should slash rates by 50 bps to jumpstart the credit cycle.
The Indian rupee and bonds would be among the top three in Asia to attract foreign inflows once tariff-related uncertainties ease, said David Hauner, head of global emerging markets fixed income strategy at BofA Securities.
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