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Curve Watch: Tight liquidity, steeper lengthy finish and wider state spreads

Curve Watch: Tight liquidity, steeper lengthy finish and wider state spreads


Edelweiss Mutual Fund’s CURVE report highlights key tendencies within the Indian bond market. For the fortnight ended December 31, 2025, short-term G-sec yields remained flat, supported by anchored near-term RBI coverage expectations and improved liquidity visibility, whereas long-term yields edged up, reflecting persistent time period premium, heavy fiscal provide, and international price uncertainty. Banking system liquidity stayed tight, pushed by advance tax outflows, sustained foreign money leakage, and year-end balance-sheet changes. State Growth Mortgage (SDL) yields hardened amid modest provide stress and cautious period demand, regardless of supportive liquidity and regular home progress situations. Company bond yields rose amid tight liquidity, heavy authorities borrowing, foreign money stress, and international uncertainty.

Printed on January 6, 2026

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