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The benchmark 6.94% 2036 bond yield was at 7.0497% as of 10:30 a.m. IST, after closing at 7.0463% in the previous session. New Delhi will raise 280 billion rupees ($2.92 billion) through a bond sale later in the day, including the liquid 15-year paper. The Reserve Bank of India's open market operation sale received robust investor interest. This operation aimed to absorb surplus liquidity from the banking system. The central bank accepted bonds at yields higher than prevailing market rates. This move precedes a significant weekly bond auction scheduled for Friday. Further liquidity absorption measures are planned for the coming week. "(The) market is in a bearish mode, and even if auction demand is decent, the yield may not ease below 7.02%-7.03% range," a trader with a primary dealership said. Sentiment has turned fragile in part due to the Reserve Bank of India announcing open market debt sales worth 1 trillion rupees for September. In its first such operation in nine years, the RBI drained liquidity equivalent to nearly 0.2% of total bank deposits on Thursday.The RBI is set to sell 250 billion rupees of bonds on Monday and a similar quantum on September 28. Traders expect the central bank to step up bond sales for liquidity absorption, as policymakers likely seek to strengthen transmission through the banking system before expected rate hikes. Excess banking-system liquidity can weaken monetary-policy transmission, reducing banks' need to borrow at the Reserve Bank of India's policy rate, which can delay increases in lending rates. Rate hike bets in India have hardened after the Federal Reserve's move to hike earlier this week, with many now expecting the RBI to raise its policy repo rate by 25 bps on October 7. The 10-year Treasury yield hit 5% after the Fed raised rates for the first time since 2023. The CME FedWatch tool shows markets are pricing in an almost coin-toss chance of another Fed rate hike in October, and an 88% chance for its December meeting. RATES Overnight indexed swap rates were little changed. The one-year rate was at 6.05%, while the two-year rate was at 6.25%, and the five-year rate was at 6.55%. (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
document fetched 2026-09-19 02:58