FX.co ★ India 10Y Yield Hits 3-Week Low

The yield on India's 10-year government securities fell below 6.5% in mid-October, marking its lowest point in three weeks, as dovish indications from the Reserve Bank of India (RBI) heightened expectations of an impending rate cut. Recent minutes from the RBI meeting revealed that policymakers are more inclined toward easing, with Governor Malhotra highlighting that lower inflation provides an opportunity to bolster growth. India's inflation rate dropped to 1.54% in September, the lowest in eight years and beneath the RBI’s target range of 2–6%, as well as below market forecasts of 1.7%, strengthening the argument for a potential rate cut in December. Although the RBI maintained steady rates earlier this month, two of its members advocated moving towards an accommodative monetary policy to support an economy under pressure from US tariffs. At the same time, investors are observing mixed signals regarding US-India trade relations, particularly after President Trump alleged that Prime Minister Modi promised to cease Russian oil imports—an assertion that New Delhi denied, stating it would continue these imports if economically favorable.