India’s Bond Market: Resilient Amid Global Volatility

As global bond markets face turbulence due to rising long-dated treasury yields in the U.S. and Japan, India's government securities are predicted to remain resilient, experts suggest. This stability is attributed to strong domestic fundamentals and accommodative policies by the Reserve Bank of India (RBI), which recently cut the repo rate by 50 basis points on June 6, 2025.

The Federal Reserve Bank of St. Louis reported a surge in the 30-year U.S. Treasury yield to 4.89% as of June 4, 2025, driven by investor concerns over inflation and fiscal challenges. Concurrently, Japan's 30-year government bond yield reached a historically high 2.89% on June 6, 2025, indicating weakening demand for long-term sovereign debt.

Despite this global volatility, Indian government bonds have shown relative stability. Sonal Bandhan, an Economics Specialist at Bank of Baroda, stated in an exclusive interview with ANI that though Indian 10-year G-secs usually follow U.S. treasury yields, recent movements have diverged due to domestic factors such as RBI liquidity measures, lesser government paper supply, buybacks, and low inflation.

(With inputs from agencies.)