The yield on India’s 10-Year G-Sec hovered near 7%, retreating to a more than one-week low as easing crude oil prices improved sentiment amid renewed hopes of a US-Iran peace agreement. Brent crude prices slipped below $100 per barrel after President Trump said Washington and Iran had “largely negotiated” a memorandum of understanding that could eventually reopen the Strait of Hormuz. Lower oil prices eased concerns that the Reserve Bank of India may need to begin an aggressive rate-hike cycle as early as next month. Additional downward pressure on yields came as the rupee strengthened after Sanjay Malhotra said the RBI would do “whatever is required” to ensure orderly forex market movements, adding that the rupee appears undervalued after depreciating around 6%. The governor further emphasized that controlling inflation remains the RBI’s primary objective, although the central bank would continue supporting economic growth if inflation conditions allow additional policy flexibility.

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