India bond yield: hopes of improving government bonds and rupees- Government bonds and expected to improve rupee

Government bonds and rupee are expected to strengthen on Tuesday as the tension on the border has reduced due to the consensus on the ceasefire between India and Pakistan over the weekend. Bond dealers said that the yield of a 10-year-old benchmark government bond is expected to decrease to 3-4 basis points on Tuesday as the market notion remains strong due to the Reserve Bank of India’s open market operation auction.

He said, due to the ceasefire, yield 3 to 4 base points can open on the benchmark bond on Tuesday. Now we are hoping to cut rates and increase liquidity through OMO which is positive for the market. The benchmark yield was 6.38 per cent on Friday, which crossed the psychological level of 6.40 per cent during the week.

The rupee fell by 0.98 percent during the week. On Thursday, the domestic currency saw the biggest one -day decline in more than two years, which ended the entire lead for both the current calendar and the financial year. But the central bank’s intervention through dollar sales helped stabilize the currency, which improved on Friday. By the end of the week, there was an increase of 0.27 per cent in the calendar year and 0.1 per cent in the financial year.

The treasury head of a private bank said, “We hope that the rupee will open close to the level of 85 per dollar, not beyond that. The dollar index will be focused because there is a risk on the rate cut (by the US Federal Reserve). Instability should now end.

First Published – May 12, 2025 | 11:26 PM IST