Indian Bond Traders Predict Yields Will Hit Three-Year High
The Reserve Bank of India is draining excess liquidity from the financial system, leading traders to forecast a prolonged slump in the bond market.
Indian bond traders anticipate a prolonged market slump as the Reserve Bank of India moves to drain excess liquidity from the financial system. This liquidity mop-up occurs alongside rising inflation and an intensifying global debt selloff, creating downward pressure on bond prices.
Financial institutions ICICI Securities Primary Dealership Ltd. and IDFC First Bank Ltd. predict the benchmark 10-year yield could reach 7.25% by December 31. If this target is met, the yield would surpass the peak recorded in May 2026 and mark a three-year high for the market.
Adding to the volatility, Citigroup Inc. has adjusted its monetary policy forecast. The global financial services company moved its expectation for an interest-rate hike by the Reserve Bank of India forward from December to October.
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