Indian government bonds stay calm ahead of fiscal updates
Indian government bonds stayed calm on Wednesday, with the 10-year yield barely moving at 6.47%.
Everyone's watching for the government's borrowing plans for late FY25 and the RBI's next policy move on October 1.
Concerns about liquidity and long-term debt
There's some anxiety that too much long-term debt could hit the market, pushing up yields and making borrowing costlier down the line.
State governments will soon announce their own borrowing schedules, adding to the uncertainty.
Plus, banks are feeling a liquidity crunch right now.
Upcoming bond and treasury bill auctions
The government is set to auction ₹16,000 crore in long-term bonds and ₹21,000 crore in treasury bills on Friday.
Despite all this activity, short-term interest rate swaps haven't budged—suggesting most investors aren't bracing for any big surprises before these fiscal updates or the RBI meeting.