
Indian bond yields stayed flat on Monday morning, with rate-cut optimism keeping prices afloat despite disappointment over the Reserve Bank of India’s (RBI) surplus transfer.
The benchmark 10-year bond yield (IN063335G=CC) was at 6.2124% by 10:00 a.m. IST, barely above Friday’s close of 6.2107%. The 2034 bond (IN067934G=CC) edged up to 6.2553% from 6.2520%.

Markets opened weak, with yields briefly spiking to 6.2270% and 6.2812% respectively. But the pullback was swift, as traders continued betting on at least 50 basis points of rate cuts in the coming months.
So, What’s Going On With Bond Yields?
The RBI announced a ₹2.69 trillion ($31.6 billion) surplus transfer to the central government for FY24—higher than last year, yes, but lower than the ₹3 trillion markets were hoping for.
Yet, the market barely blinked. Why? Because rate cut fever is hotter than disappointment cold.
As one trader at a state-run bank told Reuters:
“This figure is below expectations, sure. But it won’t derail the medium-term view—we’re still looking at liquidity support and more rate cuts.”
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What Does It Mean for You?
When bond yields stabilize or fall, borrowing becomes cheaper. For the average person, that could mean lower home loan EMIs, better lending rates, and cheaper credit. It’s a sign that the RBI is tilting toward growth, even as inflation remains under watch.
But don’t uncork the bubbly just yet—rate cuts are expected, not guaranteed. The next big test?
India’s GDP data on May 31, followed by the RBI policy meet on June 6.
Behind the Calm, a Quiet Tug of War
This is where things get interesting. The RBI wants to maintain economic momentum. The government needs fiscal support. Markets crave clarity. And traders? They’re hedging like it’s fashion week in Paris.
Meanwhile, overnight index swap (OIS) rates are moving in sync with this narrative. The one-year OIS is at 5.55%, and the five-year dipped 2 bps to 5.65%, signaling confidence in further rate cuts.
The Bigger Picture
Markets are playing the long game here. The RBI surplus wasn’t a knockout, but it’s not a showstopper either. What matters now is data, direction, and the June decision.
Bond yields, like good gossip, don’t stay quiet for long. Watch this space.
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