More Stories

Informist, Tuesday, Feb. 24, 2026

NEW DELHI – Government bond prices and overnight indexed swap rates may take cues from the overnight movement in the US Treasury yields at the market open Wednesday, dealers said. There were lack of significant domestic cues on interest rates before the release of India's GDP data on Friday, they said. 

Later in the day, gilt prices may fall as traders make room for the weekly gilt auction Friday, dealers said. On Friday, the government will sell INR 320 billion of the 6.48%, 2035 bond, its last scheduled auction of the 10-year benchmark gilt in the financial year ending March.

Traders look ahead to the release of India's GDP data for Oct-Dec and the second advance estimate for FY26 growth at 1600 IST Friday. The data will be released under a new series with 2022-23 (Apr-Mar) as the base year. India's GDP growth is likely to have slowed to 7.5% on year in the December quarter, according to the median of an Informist poll. In Jul-Sept, GDP growth was 8.2% on year in the old series with the FY12 base year. 

The one-day call money rate may open below the Reserve Bank of India's repo rate of 5.25% due to comfortable liquidity surplus in the banking system despite outflows for goods and services tax payments over the weekend. During the day, the call money rate is expected to move in a range of 4.80-5.50%.

GOVERNMENT BONDS

On Wednesday, gilt prices may open tracking overnight movement in US Treasury yields. However, later in the day, prices may fall as traders make room for the weekly gilt auction Friday, dealers said.

On Friday, the government will sell INR 320 billion of the 6.48%, 2035 bond, its last scheduled auction of the 10-year benchmark gilt in the financial year ending March. The large supply is likely to be mopped up, though traders expect lower demand from banks as they have focused on aggressively picking up higher-yielding state bonds in recent weeks, dealers said.

Traders may also track any further developments in the face-off between Iran and the US, dealers said. Significant movement in the rupee, the five-year OIS rate, and crude oil prices may also lend cues, they said.

The 10-year benchmark 6.48%, 2035 bond is seen in the range of 6.64-6.75% Wednesday. On Tuesday, the bond ended at INR 98.58, or 6.68% yield.

OIS RATES

On Wednesday, OIS rates may track US Treasury yields amid lack of domestic cues. Traders do not expect much volatility in swap rates up to one year, while the five-year OIS rate may not fall below the psychologically crucial 6.00% mark without a firm trigger, dealers said.

Traders are virtually unanimous in expecting a pause on rates in FY27 after members of the rate-setting panel said in the minutes of the February MPC meeting that they would continue to remain data-driven. Further developments on the US-Iran front will be watched closely. Significant movement in the rupee and crude oil prices may also lend cues, dealers said.

Traders expect the overnight Mumbai Interbank Outright Rate to remain at or below the repo rate of 5.25% in the near term after RBI Governor Malhotra's comments Monday assuring surplus liquidity, dealers said. The one-year swap rate is seen at 5.40-5.60% and the five-year at 5.95-6.20%. On Tuesday, the one-year swap rate ended at 5.50% and the five-year swap rate at 6.03%.

CALL

On Wednesday, the one-day call may open below the RBI's repo rate of 5.25% due to comfortable liquidity surplus in the banking system despite outflows for GST payments. During the day, the call money rate is expected to move in a range of 4.80-5.50%.

No major inflows or outflows are expected Wednesday, with the government's spending expected to add to banking system liquidity by Friday, dealers said. On Tuesday, the one-day call money rate ended at 4.75%.

RBI AUCTION

--RBI to auction 91-day T-bills worth INR 140 billion 1030-1130 IST

--RBI to auction 182-day T-bills worth INR 120 billion 1030-1130 IST

--RBI to auction 364-day T-bills worth INR 80 billion 1030-1130 IST

LIQUIDITY

Total net outflows of INR 457.14 billion. The calculation of flows does not take into account redemption of the standing deposit facility and scheduled variable rate repo and variable rate reverse repo operations.

* Inflows

--INR 3.86 billion as coupon on state bonds

* Outflows

--INR 461.00 billion as payment for state bond auction

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Aaryan Khanna

Edited by Akul Nishant Akhoury

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.