Treasury heads in buying mode as yield jumps

Meanwhile, the Economic Times daily newspaper is available online now.

Key points

• On the announcement of the FCNR(B) scheme, yields of the 5 year paper had fallen sharply to 6.31% levels by August, from 6.85% levels in June.
• ETMarkets Smart Talk How to invest ₹1 crore in bonds for 3 years: Vineet Agarwal's playbook.
• Mumbai: As the 5-year administration bond yield touches 6.50%, treasury heads are looking to step in and start buying as yields have reached a comfortable mark.
• Govt bond yields have risen 15-17 bps after central bank shortened the FCNR(B) scheme's duration by a month.
• On the announcement of early closure of FCNR(B), the 5 year paper saw a sharp reversal to 6.50% levels.

Meanwhile, the Economic Times daily newspaper is available online now. Treasury heads in buying mode as 5-year yield jumps. Treasury heads in buying mode as 5-year yield jumps. ET BureauLast Updated: Aug 21, 2026, 06: 40: 00 AM IST.

With administration bond yields now at attractive levels, treasury heads are actively thinking concerning making purchases. After the RBI's FCNR(B) scheme concluded, the five-year bond yield closed at 6.52%. Although there's speculation regarding a delay in renewed buying due to upcoming policy minutes, the banking sector's liquidity remains robust, with funds ready to be invested shortly.

Mumbai: As the 5-year administration bond yield touches 6.50%, treasury heads are looking to step in and start buying as yields have reached a comfortable mark. The 5-year g-sec yield closed at 6.52 on Thursday. Yields of this bond rose 15-17 basis points to 6.52% on Thursday after the Reserve Bank of India (RBI) decided to prematurely close its FCNR(B) scheme last week, reducing the schemes duration by a month.

"On the announcement of early closure of FCNR(B), the 5 year paper saw a sharp reversal to 6.50% levels. Now buying could commence from these levels, " remarked A N Vinod, head of treasury, South Indian Bank. Bonds Corner.

HDFC Bank raises record $1.75 billion in overseas bond sale HDFC Bank raised a record $1.75 billion through three- and five-year dollar bonds, marking the largest debt capital market raise by an Indian financial institution. Solid investor demand generated over $7 billion in bids, enabling tighter pricing and supporting FCNR(B) deposit funding.

India bond yield curve flattens on central bank unpredictability, demand for long-term debt. Investors dump India bonds after hawkish RBI minutes. RBI's surprisingly hawkish tone in policy minutes weighs on Indian bonds.

As inflows were largely for three- to five-year tenures, with a significant portion of the funds deployed in the 5-year administration bond, the 5-year paper had gained the most after the FCNR(B) scheme was confirmed. Live Events.

As the Reserve Bank of India's unexpectedly hawkish minutes of the monetary policy committee have rattled markets and triggered concern that interest rates could be headed higher, some, nevertheless, believe buying may take time to return.

In short, treasury heads in buying mode as yield jumps is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.