The 10-year government bond yielded 6.92% in the week ended 28 August 2026, on the FBIL par yield the RBI publishes. The repo rate sat at 5.25% in the same week. That gap of 167 basis points is the number worth watching. It has widened sharply. A year earlier, in the week ended 29 August 2025, the 10-year was 6.67% while the repo was 5.50%. So policy has been cut by 25 basis points and the 10-year has risen by 25. The market is not following the RBI down.
All figures on this page come from the RBI’s National Summary Data Page, dated 4 September 2026. It is weekly data, not a live screen. A live intraday yield is a market you cannot access at that price anyway.
What is the yield curve today?
| Instrument | Week ended 28 Aug 2026 | Week ended 29 Aug 2025 | Change | Basis |
|---|---|---|---|---|
| Policy repo rate | 5.25% | 5.50% | −25 bps | RBI policy decision |
| Call money rate, weighted average | 5.20% | 5.45% | −25 bps | Overnight interbank |
| 91-day Treasury bill | 5.26% | 5.51% | −25 bps | Primary auction yield |
| 182-day Treasury bill | 5.62% | 5.60% | +2 bps | Primary auction yield |
| 364-day Treasury bill | 5.80% | 5.64% | +16 bps | Primary auction yield |
| 10-year G-Sec | 6.92% | 6.67% | +25 bps | FBIL par yield |
Read that table down the first column and you have the shape of the curve. Overnight money at 5.20%, three-month paper at 5.26%, one-year at 5.80%, ten-year at 6.92%. It rises the whole way. That is a normal upward-sloping curve, and it is steeper at the long end than at the short end.
Why has the spread over the repo rate widened?
The short end of the curve does what the RBI tells it to. The 91-day bill moved down 25 basis points in exactly the way the repo did. Overnight call money did the same. Those instruments are priced off today’s policy rate and banking system liquidity. The RBI controls both.
The long end is a different market. A ten-year yield is a price for lending to the government for a decade. It reflects what buyers expect inflation and policy to average over that decade. It also reflects how much paper the government intends to sell them. A single repo cut does not change either. So the 10-year can rise while the repo falls, and over the last year it did exactly that.
The honest reading is simple. Long-end investors want more compensation than a year ago, at a time when the central bank has eased. That is a signal about supply and about expectations, not about the RBI’s current stance. We do not forecast where it goes next, and neither should anyone quoting a target to you.
Why does the one-year bill yield more than the 91-day?
Look at the middle of that table again. The 91-day bill fell 25 basis points over the year. The 364-day bill rose 16. Two instruments issued by the same borrower, nine months apart in maturity, moved in opposite directions.
The reason is that the 91-day is a near-cash instrument, and it is anchored to the current policy rate. The 364-day bill must survive a full year. That includes several policy meetings. Its price already contains a view about what happens at those meetings. The one-year yield rose while the overnight rate fell. The market is saying it does not expect the current low rate to last the year.
For an ordinary saver that is the most useful line on this page. It is also the one nobody points at. And it is why a one-year fixed deposit and a one-year bill are not the same bet. Compare it against current FD rates before you assume the bank is being generous.
What does a 6.92% ten-year mean for your money?
It sets a floor for everything else. A corporate bond must pay more than the government for the same tenor. It can default, and the government cannot. So when the 10-year rises, corporate borrowing gets more expensive. Every fixed-income fund holding long paper takes a mark-to-market hit.
That last point catches retail investors repeatedly. Bond prices move opposite to yields. A gilt fund holding ten-year paper lost value as the yield went from 6.67% to 6.92%. Nothing defaulted. No coupon was missed. The fund did what it was designed to do. The investor thought they had bought a safe deposit. A gilt fund carries no credit risk and plenty of price risk. Those are different things.
On the borrowing side, the effect on you is smaller than you would expect. Retail floating-rate loans in India are priced off the repo rate, not the 10-year. A rising long yield does not lift your home loan EMI directly. It lifts fixed-rate lending and it lifts what non-bank lenders pay for funds. See home loan interest rates for how the retail pass-through actually works.
Should a retail investor buy government bonds at this yield?
It depends entirely on whether you hold to maturity. Buy a ten-year bond at 6.92% and hold it to maturity. You get 6.92% before tax, whatever the market does in between. That is a genuine, contractual, sovereign-guaranteed return, and very little else in India offers it for a decade.
Sell before maturity and you get whatever the market pays that day. If yields have risen, that is less than you paid. The retail direct route to G-Secs makes buying easy and does nothing about this. Ease of access is not the same as suitability.
Then there is tax, which is where the comparison usually breaks. Interest on a government bond is taxed at your slab rate. At a 30% slab, a 6.92% coupon is roughly 4.8% after tax. Compare that with a tax-free or tax-deferred alternative first. Our page on government securities covers the buying routes, and RBI floating rate bonds covers the variable-rate option.
Frequently asked questions
How current is the 6.92% figure?
It is the weekly average for the week ended 28 August 2026, published by the RBI on 4 September 2026. Yields move every trading day. Treat this as the level, not as today’s price. If you are transacting, get the live quote from your broker or the RBI Retail Direct portal on the day.
Why does the RBI use an FBIL par yield rather than a traded price?
The traded price on any bond reflects its own coupon and remaining life. That is not a clean ten-year point. FBIL builds a par yield curve instead. It asks what coupon a fresh ten-year bond would need to trade at face value. That gives a comparable number week to week. It is the standard reference for Indian rupee bond valuation and it is what the RBI publishes.
Does a higher bond yield mean my debt fund will do badly?
In the short run, yes, if the fund holds long-dated paper. Existing holdings are marked down when yields rise. In the longer run the fund reinvests at the higher yield. The drag then reverses. The size of both effects depends on the fund’s duration, which is disclosed in its factsheet. A liquid or ultra-short fund barely notices a 25 basis point move. A gilt fund notices a lot.
Is the yield curve inverted in India?
No. On the week ended 28 August 2026 the curve rose at every step, from 5.20% overnight to 6.92% at ten years. An inverted curve is one where short rates exceed long rates. That is not the position here. What has changed over the past year is the slope, which is steeper.
What moves the 10-year yield most?
Three things, and none of them is the current repo rate on its own. Expected inflation over the life of the bond. The volume of government borrowing planned for the year. And demand from banks, insurers and pension funds, which are required to hold government paper. A large borrowing programme with flat demand pushes yields up. The policy rate does not stop it.
Sources
- Reserve Bank of India, National Summary Data Page — Cash Reserve Ratio and Interest Rates, page dated 4 September 2026. Primary. Read 7 September 2026. Source for the repo rate, call money rate, Treasury bill yields and the FBIL 10-year G-Sec par yield, for the weeks ended 28 August 2026 and 29 August 2025.
This page is refreshed against the RBI’s weekly release. If the as-of date above is more than a month old, treat the levels as stale and check the source link directly.
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