The Indian government bond market is currently navigating a period of range-bound trading, as investors balance heavy domestic supply against supportive global cues. The benchmark 10-year G-Sec yield is hovering around the **6.71%** to **6.73%** level, easing slightly from recent weekly highs as the market absorbs significant issuance pressure. A primary focus for traders is the substantial state borrowing activity. A massive auction of State Government Securities (SGS) is scheduled for today, February 24, 2026, with 16 states aiming to raise an aggregate of **₹44,550 crore**. This follows a recent federal underwriting auction of **₹33,000 crore**, underscoring a period of high debt supply that continues to cap any significant rally in bond prices. On the monetary policy front, the Reserve Bank of India (RBI) has provided a stabilizing anchor. In its February 2026 meeting, the MPC maintained the repo rate at **5.25%** and kept a "neutral" stance. With headline inflation projected at a moderate **3.2%** for the current quarter and expected to stay near **4.0%** in early FY27, the central bank’s "wait and watch" approach has helped mitigate extreme volatility. External factors are playing a dual role in shaping local sentiment. Stability in U.S. Treasury yields, with the 10-year note currently near **4.08%**, offers a reprieve to domestic markets. However, geopolitical risks and fluctuations in crude oil prices remain constant monitors for bond participants, as these impact inflation expectations and the rupee, which has faced pressure near the **91 per dollar** mark. Liquidity in the banking system remains a bright spot, with a surplus of nearly **₹3 trillion** helping the RBI manage orderly market conditions. Additionally, recent debt-switch operations, involving the buyback of bonds maturing in FY27, have helped ease near-term redemption stress and reduce gross borrowing concerns for the upcoming financial year. Market participants expect yields to remain within a tight corridor of **6.65% to 6.78%** in the short term. The ability of the market to absorb the current wave of state and central debt without a sharp spike in yields will be the key test for investor appetite in the final weeks of the fiscal year. [Indian bond market update](https://www.youtube.com/watch?v=z01RGOV-ZNw) This video provides a detailed outlook on the February 2026 debt market, including expert analysis on yield movements and borrowing impacts. http://googleusercontent.com/youtube_content/0