10-Year G-Sec Yield at 6.62% as Rupee Hits 10-Week High
Why in the news
Bond yields slid and the rupee strengthened together on foreign inflows and hopes of further rate cuts.
Key facts
| Indicator | Reading |
|---|---|
| 10-year yield | 6.62%; down 8 bps in the week, sharpest since November 2024 |
| Year-end forecast | About 6.60% |
| FAR net inflow this week | ₹8,560 crore |
| Rupee | 10-week high, below ₹86 per dollar |
- A 25 bps repo cut in April is priced in, with another expected in June.
- Foreign money enters via the Fully Accessible Route (FAR); the rupee beat other Asian currencies that month.
- Drivers: softer inflation, dovish US Federal Reserve hints, good growth forecasts and reforms.
Implications
- Cheaper borrowing for government and firms; a strong rupee eases imports but may hurt exporters.
- Passing ₹3 trillion in FAR would add depth and liquidity to the market.
Exam angle
- FAR; benchmark 10-year G-Sec yield.