10-Year Bond Yield Holds Near 6.84% Ahead Of ₹32,000 Crore Debt Auction

India’s benchmark 10-year government bond yield remained largely unchanged on Friday as investors awaited the outcome of the Centre’s scheduled debt auction later in the day, with softer crude prices and strong foreign inflows helping offset concerns arising from the U.S. Federal Reserve’s policy outlook.

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The yield on the 10-year benchmark bond stood at 6.8407%, marginally higher than the previous close of 6.8387%, leading to a slight decline in bond prices. Market sentiment remained cautious after the U.S. Federal Reserve retained its policy rate in the 3.50%-3.75% range but maintained a hawkish tone, with nearly half of policymakers projecting at least one rate increase later this year.

Debt Auction In Focus

The government is scheduled to raise ₹32,000 crore through a bond auction on Friday. The sale is being closely watched as it is expected to provide direction to the domestic debt market in the near term.

Bond yields have found support in recent weeks due to sustained overseas demand. As per available market data, foreign investors have purchased more than $2.2 billion worth of Indian debt so far this month, marking the strongest pace of inflows in around 15 months.

Lower Oil Prices Support Sentiment

The easing in global crude oil prices has also contributed to stability in the bond market. Brent crude has remained around the $79 per barrel mark after the United States and Iran signed a peace agreement and shipping activity through the Strait of Hormuz resumed.

Lower energy prices are viewed as supportive for inflation and external balances, reducing pressure on fixed-income markets.

Rupee Opens Marginally Lower

The Indian rupee opened 2 paise weaker at 94.35 against the U.S. dollar after ending the previous session at 94.33.

In comments to CNBC-TV18, Amit Pabari, Managing Director at CR Forex Advisors, said improving foreign inflows and softer oil prices continue to support the domestic currency.

“With oil prices remaining supportive, foreign inflows improving, and the dollar’s strength facing fresh questions, the overall bias remains positive for the rupee. Having decisively broken below ₹94.50, the pair could gradually move towards the ₹94.00–₹93.80 region in the coming days,” he said.

For now, market participants are expected to track the outcome of the government bond auction and overseas developments for fresh cues, while movements in crude oil and capital flows continue to influence domestic debt and currency markets.