Bond Market Jitters: Budget Borrowing Looms as 10-Year Yield Hits 6.7%
Budget
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CNBC TV18•28-01-2026, 14:20
Bond Market Jitters: Budget Borrowing Looms as 10-Year Yield Hits 6.7%
- •India's bond market is keenly watching the Union Budget for government borrowing figures, with the 10-year bond yield reaching 6.7% in January.
- •RBI has absorbed 75% of net government bond supply over 13 months, but rising global commodity prices and developed market yields signal potential for further yield increases.
- •Suyash Choudhary of Bandhan AMC suggests bond yields have room to rise, projecting a 10-year yield range of 6.55% to 6.85%.
- •Market expects central government borrowing of ₹11.5-11.7 lakh crore in FY27, with total bond supply potentially reaching ₹29 lakh crore including state borrowing and redemptions.
- •Abhishek Upadhyay of ICICI Securities anticipates net borrowing similar to current fiscal year at ₹11.6 lakh crore, supported by small savings, with gross borrowing uncertainty depending on RBI's role.
Why It Matters: The bond market faces uncertainty over government borrowing in the Union Budget, potentially pushing yields higher.
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