•India’s 10Y yield hovered in the range of 6.92-7.13% in May amid uncertainty over the 60-day ceasefire agreement between US and Iran. This was in the wake of US and Iran offering different accounts over the conflict in Lebanon and reports of fresh attack on Kuwait, Bahrain and Hormuz. •Indian rupee breached the record low of 96.96/$1 tracking the uptick in crude oil and continuous exit of foreign investors from the Indian market amid escalations in US-Iran conflict. •Throughout the month, RBI continued to support the local currency by selling dollars with FX reserves falling to $682.32 Bln from $690.69 Bln a month ago. RBI declared a record Rs. 2.9 trln surplus transfer to the government in FY26, compared with Rs. 2.7 trln in FY25. The higher surplus can be attributed to revaluation gains on forex reserves
