Bond yields open 1 bps higher, traders brace for Rs 48,615-crore auction

Indian Bond Market

Indian bond yields rose by 1 basis point on February 10, as traders braced for a Rs 48,615-crore state debt auction, the largest weekly issuance yet this year, so far.

The benchmark yield fell to trade at 6.7469% after ending the previous session at 6.7559%.

Traders had expected the Reserve Bank of India to announce more liquidity operations in the monetary policy review last week.

A glut of supply has overwhelmed bond demand, forcing the central bank to intervene and purchase government securities to prevent yields from spiralling higher.

“The RBI has already stepped in aggressively this financial year, purchasing nearly INR 7 trillion worth of bonds, a move that helped cap yields. However, with no additional bond-buying signals or liquidity support in the policy, markets are now recalibrating expectations,” Kunal Sodhani, head of treasury at Shinhan Bank said.

The RBI has cumulatively cut 125 basis points since February 2025. The absence of significant liquidity measures did not help government bonds either, even as RBI governor Sanjay Malhotra said ample measures were taken to shore up liquidity in the system.