Indian Bond Yields Hit 4-Month Low as RBI Steps In with Massive Liquidity Boost

• Indian 10-year government bond yields dropped to a four-month low of 6.538% after RBI's liquidity measures.
• RBI announced plans to buy ₹2 lakh crore worth of government bonds and conduct a $10 billion dollar-rupee forex swap.
• These steps aim to boost banking system liquidity and cool rising bond yields, which were impacted by tax outflows and currency interventions.
• Experts like Lakshmi Iyer and Dhawal Dalal view RBI's intervention as crucial to stabilize the market and prevent further yield increases.
• Lower yields benefit existing bondholders and debt mutual funds, potentially reducing borrowing costs, though future returns may moderate.

Why It Matters: RBI's significant liquidity injection pushed Indian bond yields to a 4-month low, stabilizing markets.