Indian bond yields face upside pressure after dovish RBI hold

Traders expect the benchmark 10-year yield to drift higher toward 6.80% as markets digest the central bank's pause and weigh rising oil prices.

By Handelsavisen Newsroom · Automated 6 August 2026, 06:51 UTC · 1 min read

Indian government bonds are expected to open little changed on Thursday, with a bias toward higher yields later in the session.

The benchmark 6.94% 2036 bond yield is projected to trend in the 6.75% to 6.80% range, according to Reuters.

25%, a move that diverged from the tightening trend seen across other Asian central banks.

The repricing follows the Reserve Bank of India’s recent decision to hold its policy rate at 5.25%, a move that diverged from the tightening trend seen across other Asian central banks.

While the pause was anticipated, the dovish tone has shifted market sentiment, with traders now factoring in the potential for further rate cuts or a prolonged period of stability.

Oil prices are adding to the pressure on Indian debt.

Rising crude costs threaten to widen the trade deficit and fuel inflation, complicating the RBI’s mandate to balance growth with price stability.