Indian government bond yields held steady on Friday morning as traders looked ahead to an upcoming debt sale that is expected to provide a read on market demand. Weekly debt auctions are a routine part of India's borrowing calendar, and strong or weak bidding at these sales is often watched as a gauge of investor appetite for government paper.

The recent stabilization of oil prices and U.S. Treasury yields is lending some support to domestic markets, a meaningful factor for India as a major oil importer sensitive to imported inflation. Meanwhile, banks are working out strategies to manage surplus liquidity, even as persistent global risks and inflation concerns continue to weigh on bond market stability.

In a separate development, India is set to launch tokenized corporate bonds next week using blockchain technology. State-run REC aims to raise five billion rupees through these debt instruments, marking India's first debt issue with instant settlement capabilities on a blockchain. The transactions will be facilitated by the Reserve Bank of India's digital currency, and only investors with active digital wallets will be able to participate in the sale. The issue follows the Reserve Bank of India's broader efforts to pilot its digital rupee and explore blockchain-based settlement in financial markets.

Source: Economic Times Markets