The period since the beginning of 2023 has been marked by growing uncertainty. Even as all nations struggled with stubborn inflation and slowing growth, continuation of the Russia-Ukraine conflict, breakout of Israel-Palestine war last October and elections in two of the most populous democracies have heightened the risks. But amidst this bedlam, Indian government bonds have been in a zen mode; with the 10-year bond trudging nonchalantly in a small range of 7-7.4 per cent.
This behaviour is in contrast with other sovereign bonds which have been swinging wildly over the last two years. Indian government securities (G-secs), on the other hand, seem to have been insulated from the volatility in global markets in this period.
This was corroborated by a businessline analysis of the correlation between the 10-year US treasury securities and 10-year sovereign bonds of India, China, Brazil, Indonesia and South Korea. It was found that the…
