The finance ministry expects the yield on government securities – which dropped below the 7% mark for the 10-year paper in intraday trade on Thursday for the first time in about 13 months – to moderate further over the course of this fiscal year, a senior official said.
The yields on short-term instruments like treasury bills, too, will likely ease, he added. The yield moves in the opposite direction of a bond’s price.
“In addition to the global factors (including the recent drop in oil prices and a possible pause on rates by the US Federal Reserve), the feeling among bond market participants that government securities won’t flood the market in FY24 is finally sinking in. Domestic inflation, too, is likely to moderate,” said the official.
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