Puneet Pal of PGIM India Mutual Fund expects yields to keep trending higher as the RBI starts monetary tightening from its June policy meeting, with policy rates possibly rising 50-75 bps by the end of 2026. Money market yields up to one year, near 8%, are viewed as attractive for short-term investors. During the week, government bond yields rose 3-6 bps as the INR hit a record low of 96.83/USD and the RBI announced a USD 5bn buy/sell swap. Analysts expect the balance of payments deficit to be around USD 50bn, so measures to attract dollar inflows may soon follow, though he sees no comparison with 2013 since inflation is below 4%.
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Original headline: Expect 10yr benchmark bond yield to trade in a range of 6 . 90 % to 7 . 25 % over the course of the next one month
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