• On Monday, the 10-year benchmark government bond (6.48% GS 2035) opened 3 bps lower at 6.91% due to the lower-than-expected size of the Apr–Sept government borrowing calendar and INR appreciation. • Over the day, the 10Y point elevated on short-selling amid tracking the fall in INR to a fresh record low amid poor risk appetite among market participants at the end of FY26. • The INR fell to a fresh record low of 95.22/$ mark due to constant demand for dollars from oil marketing companies and foreign funds who were looking to exit Indian equities. • The new directive from RBI which constrained banks' net open rupee positions in the onshore deliverable foreign exchange market to $100 mln did provide a boost to the Indian unit in the first half but failed to limit a sharp fall in the Indian unit in the second half to trade. INR ended at 94.83/$ compared to Friday’s close of 94.81/$. • The latest banking system liquidity stayed in surplus of ~INR 1273.43 Bn. The 10Y yield closed 10bp higher at 7.04% vs 6.94%.
