This comes in the wake of a spike in G-Sec yields and the banking system’s liquidity surplus not being sufficient. As of January 26, the liquidity surplus in the banking system stood at just ₹56,987 crore. Normally, the surplus should be between ₹1.50 and 2.00 lakh crore.
The OMO purchase auction of G-Secs in two tranches of ₹50,000 crore each will now be held on January 29, 2026 and February 5, 2026 instead of February 5, 2026 and February 12, 2026.
The yield on the benchmark 10-year G-Sec (6.48 percent GS 2035) rose 6 basis points to 6.72 percent, an 11-month high, compared to the previous closing rate of 6.66 percent. Price wise, this G-Sec fell around 42 paise.
Nuvama Wealth noted in a report that despite the RBI’s monetary policy committee having cumulatively cut the repo rate by 125 basis points to 5.25 percent since February 2025, the 10-year G-Sec rate has remained high.
This is due to a weak rupee and uncertainty over the India-US trade deal, and news that Bloomberg Index Services would delay the inclusion of India’s fully accessible route bonds in its flagship Global Aggregate Index.
Nuvama noted that the liquidity of the banking system fluctuated throughout FY26 due to the depreciation of the rupee, outflow of advance taxes and regular tax withdrawal related to VAT.
According to the report, this week’s glut of bond supply, including G-Secs and sovereign development bonds, has kept the overall sentiment in the bond market bearish.
Published on January 27, 2026
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