Bond supply may outweigh demand, push yields higher
Economic Times 2 hrs ago·30 Sept 2026, 12:12 am
Government bond yields in India are expected to rise in the coming months. This shift is driven by a large increase in government borrowing to fund its spending plans. Simultaneously, persistent inflationary pressures are keeping the central bank's policy rates high, which supports higher yields.
For investors, this development is significant as rising yields generally lead to a decline in the prices of existing bonds. This can negatively impact fixed-income portfolios. Furthermore, the outlook remains sensitive to external factors, with crude oil prices acting as a key variable that could further influence the direction of yields.
Investors should monitor the government's borrowing calendar and upcoming inflation data. A sudden spike in oil prices could accelerate the rise in yields, while a slowdown in government borrowing might ease the pressure. Keeping an eye on these factors will be crucial for managing bond portfolios in the near term.
Excerpt from Economic Times
Bond yields in India are anticipated to increase in the latter half of this fiscal year. This rise is primarily due to higher government borrowing and ongoing inflationary pressures. Analysts expect demand for government securities to fall significantly short of supply. The trajectory of bond yields will also be…Read the original at Economic Times
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