Indian benchmark bond yield surges to 6.63%, highest level in current financial year

Bonds

Yield on the government securities, especially 10-year benchmark bond rose to its highest levels in the current financial year and touched 6.63 percent levels in the evening trade due to sell-off by foreign investors in the FAR securities and anticipation of end of rate cut cycle, market experts said.

The 10-year benchmark bond yield was trading at 6.63 percent in the evening trade, as compared to 6.59 percent levels at open, and previous close. The current yields are highest since March 25, 2025, levels, when it was trading at 6.64 percent.

“Selling pressure intensified further because of delays in the US trade deal and a sharp depreciation in the rupee, which also led FPIs, who had been net buyers from July to November, to turn into net sellers,” said Mataprasad Pandey, vice-president at Arete Capital Service.

In the last one week, the bond yields have gone up by around 10 basis points (bps). This is despite the 25 basis points (bps) rate cut by the Reserve Bank of India (RBI) in the December monetary policy.

On December 5, the RBI cut repo rate by 25 bps to 5.25 percent from 5.5 percent after holding the rates in August and October. The monetary policy committee kept the stance unchanged at “neutral”. Even after this the bond yield kept rising.

According to the Clearing Corporation of India (CCIL) data, foreign investors have pulled out Rs 8,150.362 crore from government securities under FAR route in last one week.

Further, the yield got pressure from the rising yield on the US Treasury notes and Japanese government bonds.