FX.co ★ India 10Y Yield Rallies to 4-Week High

On October 1, 2025, the yield on India's 10-year Government Security (G-Sec) rose to 6.59%, marking its seventh consecutive session of increases and reaching a four-week peak. This upward movement followed the Reserve Bank of India's (RBI) decision to maintain its policy rate. The RBI kept the repo rate steady at 5.5%, citing that low inflation levels had "created opportunities to support growth." The GDP forecast for the fiscal year 2026 was adjusted upward to 6.8% from 6.5%, and the inflation projection was lowered to 2.6% from 3.1%, with the central bank maintaining a neutral outlook. Although the market largely anticipated the RBI’s decision to hold, some economists believe that external challenges might provide room for a 25 basis point rate cut in December. Additionally, Governor Sanjay Malhotra noted that recent fiscal measures, such as GST reductions, are still in effect, while warning that uncertainties in trade policies could affect external demand. India has been dealing with US tariffs of up to 50% on key exports and increased H-1B visa fees. However, consumer tax reductions announced by Prime Minister Modi's administration are expected to bolster growth and ease inflationary pressures.