Bond yields steady as government surprises with lower-than-expected H1 borrowing

Sovereign bond yields held steady at the open on March 30 after the government announced a lower-than-expected borrowing calendar for the first half of FY27 even as traders tracked Brent crude prices for cues.

The benchmark 10-year bond yield was trading at 6.9451 percent, almost unchanged from its previous close of 6.9419 percent.

India will borrow Rs 8.21 lakh crore, about half of the annual requirement of Rs 16.09 lakh crore for the April-September period.

While the initial budget target was higher at Rs 17.2 lakh crore for FY27, the government managed to bring its total gross borrowing down to Rs 16.09 lakh crore, thanks to switching of government securities.

Switching of G-Secs is a form of debt management where the government replaces its old debt with new debt. The government identifies bonds that are due to be repaid very soon, and instead of paying them off in cash immediately, the government offers the investors new bonds that will mature much later.