Bonds In India Slide As Stronger GDP Data Damps Rate-Cut Bets
August 29, 2025
Indian bonds slumped on Friday after stronger-than-expected economic data dampened hopes of near-term interest rate cuts by the Reserve Bank of India. The benchmark 10-year bond yield jumped as much as 11 basis points to 6.64% before trimming gains. Sentiment also soured after the RBI accepted bids at higher-than-expected yields at a bond sale, signaling weaker demand from investors. The sharp selloff underscores growing concern among traders that faster economic growth could reduce the urgency
Indian bonds slumped on Friday after stronger-than-expected economic data dampened hopes of near-term interest rate cuts by the Reserve Bank of India.
The benchmark 10-year bond yield jumped as much as 11 basis points to 6.64% before trimming gains. Sentiment also soured after the RBI accepted bids at higher-than-expected yields at a bond sale, signaling weaker demand from investors.
The sharp selloff underscores growing concern among traders that faster economic growth could reduce the urgency for the central bank to ease monetary policy further. Higher yields also risk pushing up borrowing costs for Indian businesses, and may dilute the impact of the 100 basis points of rate cuts delivered between February and June.
The benchmark 10-year bond yield jumped as much as 11 basis points to 6.64% before trimming gains. Sentiment also soured after the RBI accepted bids at higher-than-expected yields at a bond sale, signaling weaker demand from investors.
The sharp selloff underscores growing concern among traders that faster economic growth could reduce the urgency for the central bank to ease monetary policy further. Higher yields also risk pushing up borrowing costs for Indian businesses, and may dilute the impact of the 100 basis points of rate cuts delivered between February and June.