More supply at longer end, GST-cut proposal keep bond yields elevated

Yields on state government bonds also hardened sharply. The 10-year SDL yield, which was in the range of 6.84-6.88 per cent in the first week of April, has climbed to 7.09-7.17 per cent as of Aug 19

On Friday, a large non-banking financial company which is in the upper layer of the Reserve Bank of India’s scale-based supervision list, postponed its bond issuance due to lack of investor appetite as yields stayed elevated. A 15-year government security, introduced in early July, saw yields surging 25 (basis points) bps in a very short span. 

Yields on state government bonds also hardened sharply. The 10-year SDL yield, which was in the range of 6.84–6.88 per cent in the first week of April, has climbed to 7.09-7.17 per cent as of August 19. The rise has been even sharper at the