Indian Government Bond Yields Rise Amid US Influence and Liquidity Challenges

Indian government bond yields rose to a 10-month high, influenced by rising US Treasury yields and concerns over liquidity. Despite multiple RBI rate cuts and record bond purchases, long-term yields remain elevated due to transmission challenges and reduced banking system liquidity. Market participants are closely watching the weekly state debt auction, which features lower borrowing than planned, while traders anticipate limited movement until the federal budget announcement on February 1. The situation reflects ongoing pressures on funding costs amid global and domestic factors.