New Delhi: The benchmark 10‑year government bond yield is expected to edge lower till February, driven by softening in inflation, improving fiscal health, and easing crude oil prices, a report said on Monday.
A report from Crisil Intelligence forecasted that benchmark 10‑year government bond yields will trade between 6.38–6.48 per cent by February 28, 2026. Currently it is at 6.54 per cent.
State development loan yields are expected to ease from 7.15 per cent to 6.98 per cent-7.08 per cent range by February end while 10-year corporate bond yields may fall from 7.15 per cent to 6.98 per cent- 7.08 per cent range.
“Policy remains open for a rate cut amid benign inflation, but the RBI will likely stick to a data dependent approach given the uncertain global environment,” the report said.
Domestic consumption is likely to drive growth, supported by benign inflation, GST rationalization, income tax relief, it said.
Crisil forecasted GDP to grow at 7 per cent compared with 6.5 per cent in fiscal 2025, and expects CPI-based inflation to soften to 2.5 per cent in FY26.
Sharper-than-expected fall in food inflation, healthy agriculture growth, benign global crude prices and GST rate cut benefits are expected to keep food inflation in check, the report noted.
Regarding improving fiscal health, the report said, the budget has targeted reducing the Centre’s fiscal deficit to 4.4 per cent of GDP in fiscal 2026 from 4.8 per cent of GDP in FY25.
“We expect crude oil prices to average $60-$65 per barrel in calendar year 2026, compared with an estimated $65-70 per barrel in 2025,” the ratings agency said.
“Our November view is based on our inflation estimates and benign oil prices, which offset the impact of geopolitical uncertainties and slowing global growth,” the firm said.
In three months, the yield could be influenced by market liquidity, renegotiation of US tariffs, foreign portfolio investor (FPI) inflows, rupee depreciation, the FOMC’s decision and the borrowings by the state and central governments.
(IANS)
