YIELD TRACKER: 10-YEAR BOND YIELD EDGES HIGHER AHEAD OF SWITCH AUCTION; LIQUIDITY SURPLUS IN FOCUS

India’s 10-year government bond yield rose marginally in early trade on April 20 as traders awaited a switch auction worth Rs 30,000 crore, where the government plans to convert short-tenor securities into longer-maturity debt.

At 9:06 am, the 10-year bond yield was at 6.917 percent, up 2 basis points from its previous close of 6.905 percent.

Market participants said a large surplus of liquidity in the banking system could support shorter-duration bonds. Surplus liquidity stood at around Rs 4.4 trillion as of April 16, according to a Bloomberg Economics index, with excess cash having climbed to a four-year high earlier this month. The Reserve Bank of India has been conducting short-term liquidity absorption operations to manage the surplus.

Global cues remained mixed, with oil prices rising and the US dollar strengthening amid renewed geopolitical tensions involving the US and Iran.

Brent crude jumped over 5 percent to around $95 per barrel, rebounding after sharp losses on Friday when Iran had said the Strait of Hormuz was “completely open.” Concerns that higher oil prices could fuel inflation weighed on global bond markets, pushing yields higher.

The US dollar also strengthened, regaining safe-haven appeal after easing in recent weeks on hopes of a de-escalation in Middle East tensions.

2026-04-20T03:45:46Z