India’s 10-Year Bond Yield Eases Marginally Amid Liquidity and Fiscal Watch

India’s debt market witnessed a slight softening in yields as the 10-year benchmark government bond (IN064835G=CC) closed at 6.7055%, down from 6.7194% in the previous session. The movement highlights investor positioning ahead of the upcoming Union Budget 2026, where fiscal deficit targets and borrowing plans will be closely scrutinized.

Market participants noted that the Reserve Bank of India’s liquidity operations, including refinance and marginal standing facility borrowings, have influenced short-term sentiment. Traders expect volatility to remain contained until fresh fiscal cues emerge.

Key Highlights:

• Current Yield: 6.7055% (Jan 27 close).
• Previous Close: 6.7194%.
• Drivers: Anticipation of Union Budget announcements, RBI liquidity management.
• Investor Sentiment: Cautious but stable, with preference for sovereign debt.
• Outlook: Yield trajectory likely to hinge on fiscal deficit targets and borrowing calendar.

Analysts suggest that while yields remain range-bound, any deviation in fiscal discipline or borrowing estimates could trigger sharper movements in the coming weeks.

Sources: Reuters, Economic Times, Business Standard.