Mumbai's 10-year government bond yield hits 1-month high
Mumbai's 10-year government bond yield just hit a one-month high at 6.57% after the government decided to borrow more using these bonds for October-March.
Weekly auctions are also up, from ₹30,000 crore to ₹32,000 crore.
Investors are playing it safe ahead of the RBI's big policy meeting
When yields rise like this, it usually means borrowing money could get pricier soon—for the government and maybe even for businesses or big projects.
Investors are playing it safe ahead of the RBI's big policy meeting on October 1, 2024, since more supply and less demand for long-term bonds can shake up market costs.
The government tweaked its strategy
The government tweaked its strategy: fewer ultra-long (30+ year) bonds and more focus on 10-year ones to match what investors want right now.
Even with these changes adding extra supply to a cautious market, most dealers think things still look manageable for buyers.