Data from the Reserve Bank of India revealed that reserve money and currency in circulation grew by 4.8% and 7.0% year-on-year, respectively, for the week ending June 20, 2025. This reflects a moderation compared to the 8.6% and 6.2% growth recorded during the same period last year, indicating tighter liquidity conditions in the banking system.
Meanwhile, the capital markets witnessed significant fundraising activity. According to media reports, Piramal Finance accepted bids worth ₹2,900 crore through the reissue of multiple maturity bonds. IndiGrid Infrastructure Trust successfully raised ₹2,650 crore via bonds maturing in four, five, and ten years. Additionally, Rural Electrification Corporation Ltd. announced plans to raise ₹7,000 crore through bonds maturing in two and ten years.
In the broader debt market, Indian bond yields remained under pressure earlier in the fortnight due to elevated crude oil prices linked to geopolitical tensions in the Middle East. However, sentiment improved after the ceasefire between Israel and Iran, alongside dovish commentary from the Reserve Bank of India Governor. The 10-year benchmark G-sec yield (6.33% GS 2035) closed marginally higher by 2 basis points at 6.32%.
U.S. Debt Market Trends
Globally, U.S. Treasury yields declined sharply. The yield on the 10-year U.S. Treasury fell by 19 basis points to 4.23%, down from 4.42% in the previous fortnight. Treasury prices rose amid market speculation that the U.S. President may announce an early replacement for the Federal Reserve Chair. The Fed Vice Chair's indication of a potential interest rate cut as early as July 2025 further boosted safe-haven demand for U.S. government bonds.
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