India 10-Year Bond Yield Rises to 7.31% as Rupee Weakens to 94.25

India's benchmark 10-year government bond yield rose on Friday, surrendering more than half of the previous week's gains amid inflation and interest-rate concerns, according to Economic Times. The yield on the 6.94% 2036 bond ended at 7.3079%, up from 7.2467% on Thursday and 12 basis points higher on the week after plunging 22 basis points the prior week.

Bond Yields, Inflation and Debt Supply

India's five-year government security yield rose 3 basis points to 6.98% on Friday, Business Standard reported. India's October retail inflation accelerated to 6.09% from 5.54% in September, breaching the upper tolerance band of the Reserve Bank of India's target. New Delhi also sold 340 billion rupees ($3.61 billion) of the benchmark note on Friday, lifting its outstanding issuance to a record 2.72 trillion rupees, Economic Times reported. Meanwhile, the 10-year U.S. Treasury yield hovered around 5.12%, up 26 basis points for the week, with traders pricing in a 14% chance of a 50-basis-point Federal Reserve rate hike on December 9, Economic Times said. On October 7, 2026, the Reserve Bank of India increased the repo rate by 25 bps to 5.50% and shifted its policy stance to calibrated tightening, according to Mata Research. During the November 13, 2026, auction for the 6.94% GS 2036 bond, the RBI set the implicit yield at 7.3203% for the ₹34,000 crore offering, with no devolvement on primary dealers, according to Reserve Bank of India. Foreign portfolio investor holdings in gilts grew by ₹97.55 billion between October 30 and November 13, 2026, driven by ₹27.50 billion in the 6.94% 2036 benchmark bond, according to BasisPoint Insight. Barclays, ANZ, HDFC Bank and IDFC FIRST Bank expect a quarter-point December rate hike from the RBI, generally followed by another in February, while Emkay forecasts 50 basis points of further tightening, according to BasisPoint Insight.

Overnight Indexed Swaps and Rupee Slide

Overnight index swap rates rose 13 to 17 basis points for the week, with the one-year rate ending at 6.50%, the two-year rate at 6.51% and the five-year rate at 6.61%, Economic Times reported. In the currency market, the rupee weakened to settle at 94.25 per dollar from 94.04 on Thursday after touching an intraday low of 94.29, Business Standard reported. Brent crude prices climbed to around $95.87 per barrel following reported attacks on Saudi Aramco infrastructure and shipping disruptions, while the dollar index held near 103.19, Business Standard said.

Foreign Exchange Reserves

Separately, Reserve Bank of India data released on Friday showed India's foreign exchange reserves climbed by $2.49 billion to $719.547 billion during the week ended November 6, Business Standard reported. Gold reserves increased by $2.21 billion to $104.8 billion, while foreign currency assets declined by $232 million to $591.35 billion.