今年伊始，印度债券收益率呈下行趋势，随着政府减少债券供应，而国内外投资者的强劲需求意味着债券供应很快被抢购一空，这一趋势持续下去。在保险、养老基金等长期投资者主体增加的情况下，印度政府坚持财政审慎计划，降低财政赤字目标和市场借款。印度的目标是在本财政年度将财政赤字减少到国内生产总值(GDP)的4.9%，总借款固定在14.01万亿卢比。The India 10-Year Treasury Notes Yield experienced the largest decline in four years in 2024.
According to Zhito Finance, the India 10-Year Treasury Notes Yield saw its largest drop in four years in 2024 due to the Indian government's fiscal discipline and its debt being included in the Global index, which boosted demand. Investors are waiting for the beginning of India's easing cycle in 2025. On Tuesday, the yield closed at 6.7597%, down 42 basis points year-on-year, after a previous decline of 15 basis points in 2023. This is the largest drop since a decrease of 66 basis points in 2020.
ICICI Bank's senior economist Abhishek Upadhyay stated: "Despite the unexpected rise in the inflation rate, tightening liquidity in the banking system, and significant fluctuations in USA yields, government bond prices will steadily rise in 2024."
At the beginning of this year, India bond yields trended downward as the government reduced bond supply, while strong demand from domestic and foreign investors meant that the bond supply was quickly snatched up, a trend that continued. With increased participation from long-term investors such as Insurance and Retirement Funds, the Indian government adheres to a fiscally prudent plan, lowering the fiscal deficit target and market borrowing. India's goal is to reduce the fiscal deficit to 4.9% of Gross Domestic Product (GDP) in the current fiscal year, with total borrowing fixed at 14.01 trillion rupees.
In June of this year, India bonds were included in the JPMorgan Emerging Markets Bond Index, which also boosted the bond market. By the end of December, its weighting had risen to 7%. Foreign investors net purchased bonds worth 1.2 trillion rupees in 2024, with more than half purchased after June.
India bonds will be included in two additional Global indexes in 2025 — the Bloomberg Index Services in January and the FTSE Russell Index in September — which could lead to a total inflow of 7 billion to 10 billion USD. The India bond yield curve remained largely flat throughout the year due to strict financing controls by the Indian central bank, and government spending was also constrained by the elections.
As the new year approaches, market participants are betting that the Reserve Bank of India will cut interest rates as early as February next year, even though the interest rate outlook in the USA remains unclear. In December, the Federal Reserve significantly lowered its rate cut expectations for 2025 from 100 basis points to 50 basis points, while the market's expected rate cut is only 45 basis points.
Upadhyay stated: "Despite the possibly ongoing global turmoil, Emerging Markets currencies may face greater pressure, but the outlook for India's fiscal deficit and declining inflation should help ease volatility in the Bonds market, which is expected to rise further this year."
