India bonds gain as RBI FX inflows lift liquidity, spur short-term debt buying

Indian government bonds saw gains early Thursday, led by shorter-term debt. Larger dollar inflows boosted rupee liquidity and improved sentiment for Indian assets. Banks raised significant foreign currency, adding to domestic liquidity for several years. This influx strengthened India's ability to support the rupee and domestic markets. Elevated oil prices and US Treasury yields continued to weigh on longer-dated bonds.