India’s 10-Year Bond Yield May Dip Below 7 pc by June: Report

Apr 16 (BNP): India’s benchmark 10-year government bond yield may ease below the 7% level by June, although short-term volatility is likely to continue due to global and domestic economic factors, according to a report.

 The report notes that bond yields saw sharp fluctuations in March, mainly driven by rising crude oil prices and geopolitical tensions, which pushed yields to their highest level in the current financial year.

However, easing inflation pressures, adequate liquidity in the financial system, and expectations around policy stability are expected to support bond market conditions in the coming months.

On the macroeconomic front, India’s GDP growth is projected at around 7.1% for the current fiscal year, supported by strong domestic consumption and steady investment activity. Export performance is also expected to benefit from lower tariffs, although global trade disruptions and slower world growth could weigh on momentum.

The report also highlights that government efforts to manage retail fuel prices may help support household consumption. Inflation is projected to average around 4.5% in FY27, while comfortable liquidity conditions are expected to provide additional stability to financial markets.