FII Inflows to Keep Domestic 10-Year G-Sec Yield Within 6.48%–6.58% Range in November

According to a report by Bank of Baroda, India's 10-year government bond yield is expected to remain within the 6.48%-6.58% range during November, supported by stronger foreign institutional investor (FII) inflows and a stable inflation outlook. 

The anticipated inflows are being partially attributed to the widening rate differential with the US and balanced government borrowing.

Bond Yields Stabilising Amid Global and Domestic Factors

Since August 2025, India's 10-year bond yield has displayed relative consistency, trading in a narrow range. The month of November is expected to continue this trend with the yield projected between 6.48%-6.58%. 

Key drivers include a favourable interest rate gap with the US and predictable macroeconomic signals. The streamlining of government borrowing, especially a reduced share in the 10-to-20-year maturity segment, has also helped stabilise pressures on yields.

FII Inflows Supporting Downward Bias in Bond Yields

Accelerated FII inflows are adding a downward bias to yields in India’s bond market. As global yields shift following US central bank decisions, India's comparatively stable environment attracts more foreign capital. 

Expectations of rate holds by the Federal Reserve and softening US employment data have also encouraged higher South Asian inflows.

Read More: Japan’s 30-Year JGB Yield Rises to 3.09% as Curve Steepens Ahead of Auctions!

Liquidity Management and Borrowing Strategy Providing Stability

Durable liquidity remains stable after a dip due to falling foreign currency assets. The Indian government’s structured borrowing plan across different maturities has prevented excessive volatility. The drop in the 10-to-20-year segment borrowings has lessened the strain on the long-end yield curve.

Conclusion

India’s 10-year bond market appears poised to remain within the projected 6.48%-6.58% range during November. With supportive FII inflows, a structured borrowing approach, and global financial divergence, the bond market is expected to carry a mild downward yield bias throughout the month.

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