What has caused the recent surge in government bond yields?

The recent surge in government bond yields has been driven by concerns about fiscal slippage and low demand, particularly from insurance companies and pension funds.

How high have the government bond yields reached?

The benchmark government bond yield closed at 6.5967% on August 25, 2025, its highest level since March 27, 2025.

Home / Business and Economy / Bond Yields Reach 5-Month High Amid Fiscal Worries and Low Demand

Bond Yields Reach 5-Month High Amid Fiscal Worries and Low Demand

Q: What is the potential impact of the rising bond yields?

The rising bond yields could have significant implications for the broader financial landscape, as it could impact borrowing costs and investment decisions across various sectors.

25 Aug

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Summary

Benchmark yield closes at 6.5967%, highest since March 27
Yield increased by 27 bps since last policy
Lack of buyers, insurance companies, and pension funds exacerbate demand-supply

Bond Yields Reach 5-Month High Amid Fiscal Worries and Low Demand

According to the news report, the yield on government bonds reached a five-month high on Monday, August 25, 2025. This surge in bond yields was driven by worries about fiscal slippage and low demand in the market.

The benchmark yield closed at 6.5967%, its highest level since March 27, 2025, and has increased by 27 basis points (bps) since the last policy announcement. The lack of buyers, including insurance companies and pension funds, along with the potential for no more interest rate cuts, have exacerbated the demand-supply imbalance in the bond market.

Analysts suggest that the ongoing fiscal concerns and the dwindling demand from key institutional investors have contributed to the sharp rise in government bond yields. This trend is likely to have significant implications for the broader financial landscape, as it could impact borrowing costs and investment decisions across various sectors.

Disclaimer: This story has been auto-aggregated and auto-summarised by a computer program. This story has not been edited or created by the Feedzop team.