A day after, bond yield closes flat at 6.16% amid liquidity surplus

Given the plan to borrow an additional Rs 4.2 trillion from the market, yields will show a tendency to move up. But, the huge liquidity in the system kept the rise in check, bond dealers said.

The yield of 10-year benchmark bonds closed flat on Tuesday after witnessing a sharp uptick the day before in reaction to the government’s plans to borrow more from market.

The yield on 10-year government of India paper (6.45 per cent, 2029) stood at 6.16 per cent at close of trading as against 6.17 per cent on Monday.

The Reserve Bank of India (RBI) said last week that the Centre’s estimated gross market borrowing in financial year 2020-21 (FY21) would be Rs 12 trillion instead of the Rs 7.8 trillion according to the Budget Estimates. The revision was necessitated because of