G-sec yield curve shifted downward along mid segment of term structure says RBI

Reserve Bank of India (RBI) stated in a latest monthly update that the 10-year G-sec yield remained relatively stable during the second half of November even as US treasury yields hardened. The benchmark yield softened to its lowest level in almost three years on December 4, 2024 on expectations of monetary policy easing by the Reserve Bank in the backdrop of a sharper-than-expected slowdown in GDP growth in Q2:2024-25. The G-sec yield curve shifted downward along the mid segment of the term structure. During November 16 and December 19, the average term spread (10-year minus 91-day T-bills) remained stable at 36 bps. The spread of the 10-year Indian G-sec yield over the 10-year US bond fell to 222 bps as on December 19, 2024 from 310 bps in mid-September and 324 bps a year ago.

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