The Reserve Bank of India has completed an auction for a new 10-year government security, raising Rs 34,000 crore at a 6.94% cut-off yield. Demand was strong enough to push bids above Rs 1 lakh crore. The fresh bond is set to become the new benchmark, shaping corporate borrowing costs and influencing overall interest rate direction.
Global debt has surged to a record near 353 trillion, and investors are beginning to look beyond US Treasuries. With expectations pointing to rising US debt but steadier paths for parts of Europe and Japan, demand is drifting toward Japanese and European government bonds. Meanwhile, US corporate bond markets are heating up, adding to the shift.
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The Reserve Bank of India has decided to keep the foreign portfolio investor limit for government securities via the general route unchanged for 2026-27. The RBI set the ceiling at 6% of the outstanding stock of securities, signaling continuity in how foreign flows into G-secs will be managed despite evolving market conditions.
Rising sovereign bond yields are likely to trigger mark to market losses for Indian banks in the March quarter. Even as the RBI conducted open market operation purchases, 10-year government bond yields climbed to a 12-month high, driven by geopolitical risks and persistent inflation worries, pressuring banks’ bond portfolios.
China’s finance ministry has sold its first 30-year special government bonds at a 2.20% yield, the lowest since November 2025. The cheaper long-dated borrowing suggests easing inflation worries and stronger investor sentiment. The issuance supports Beijing’s national funding plans while using staggered sales to reduce liquidity shock risk.
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