India bond yield curve flattens on central bank unpredictability, demand for long-term debt

Indian bond yields are experiencing a flattening trend as the central bank's policy adjustments begin to influence borrowing costs. The Reserve Bank of India has hinted at possible interest rate increases, prompting a rise in shorter-term yields. Meanwhile, robust demand from institutional investors is driving interest in longer-term government securities, aided by decreased state debt issuance, which influences the government's overall borrowing strategy and market expectations.