Finance & Economy | News & Insights

Monthly Debt Market Update – August 2023

Published: August 2, 2023



  • US yields rose after robust Q2 GDP data fueled bets of more Fed rate hikes.
  • European bond yields seen higher with another September rate hike on the cards.
  • Upside in UK gilt yields could remain capped if ongoing economic slack worsens.
  • BOJ’s YCC policy adjustment likely in the last quarter of 2023.


  • 10-year bond yield rose to 7.17% as inflation concerns resurfaced.
  • Banking system liquidity remained in surplus on healthy government spending.
  • RBI could continue with VRRR auctions to keep system liquidity near neutral.
  • Net FPI inflows rose for the fifth straight month to USD 5.6 billion in July.
  • We expect RBI to maintain an extended pause in 2023 owing to upside risks to inflation.
  • 10-year benchmark bond yield seen around 7-7.2% by end-FY24.
  • Rupee is expected to remain in 81-83 range by end-FY24.


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