India's 10-Year Benchmark Govt Bond Yield Edges Up 2 Basis Points to 6.5239%

Image Source : The Economic Times

India’s 10-year benchmark government bond yield rose by 2 basis points to close at 6.5239%, slightly higher than the previous day's 6.5030%. This movement reflects market reactions to debt supply, Reserve Bank of India’s signals, and macroeconomic outlook amid ongoing investor activity in sovereign debt.

The yield on India’s 10-year benchmark government bond (IN063335G=CC) closed 2 basis points higher at 6.5239% on October 9, 2025, compared to the prior close of 6.5030%. This modest uptick indicates slight upward pressure on bond yields amidst active government borrowing and evolving investor sentiment.

The Indian government recently increased the share of 10-year bonds in its borrowing plan for the current fiscal half-year, resulting in a fresh bond auction raising ₹320 billion. The cut-off yield for that auction settled around 6.48%, broadly in line with market expectations. This issuance injects supply-side influence pushing yields moderately higher, intersecting with global and domestic economic factors.

The Reserve Bank of India (RBI) kept its policy rate steady at 5.50% during its September meeting, citing subdued inflation that allows room for growth-supportive measures. RBI Governor Sanjay Malhotra raised the FY2026 GDP growth forecast to 6.8%, lowered inflation to 2.6%, but cautioned on risks from trade policies and tariffs that could impact external demand.

Market participants anticipate potential policy easing with a possible 25 basis points rate cut in December, supporting expectations for a more accommodative monetary stance. Meanwhile, investors remain watchful of borrowing calendars, fiscal discipline, and global economic headwinds influencing bond markets.

Important Points:

10-year benchmark yield increases slightly to 6.5239%, up 2 bps from prior close.

Government bond auction raised ₹320 billion at a cut-off yield near 6.48%.

RBI holds policy rate at 5.50%, maintaining accommodative tone amid low inflation.

FY2026 GDP growth forecast increased to 6.8%, inflation forecast lowered to 2.6%.

Market eyes possible RBI rate cut of 25 bps in December meeting.

Supply-side pressures and external trade uncertainties drive cautious sentiment.

India’s sovereign bond yields remain attractive for investors balancing growth and inflation outlooks.

This movement in bond yields underlines the ongoing balancing act between government financing needs, monetary policy signals, and global economic conditions shaping India’s fixed income market landscape.

Sources: Trading Economics, Economic Times, Investing.com, Reuters