Indian government bonds registered moderate gains on Monday, February 23, 2026, as domestic yields softened amid stabilizing geopolitical conditions and strategic central bank interventions. The 10-year benchmark federal paper yield slipped to approximately **6.71%**, easing from a previous high of **6.73%**. The market sentiment has been bolstered by a pause in geopolitical volatility. Previous concerns regarding trade tariffs and international regional tensions have subsided, allowing for a relief rally across domestic fixed-income assets. This shift has prompted a more favorable environment for sovereign paper despite ongoing global economic shifts. The Reserve Bank of India has maintained a steady hand, keeping the repo rate unchanged at **5.25%** during its February policy meeting. The central bank continues to hold a neutral stance, emphasizing a balance between supporting resilient economic growth and managing inflation, which recently tracked at a benign **2.75%**. Supply-side pressures remain a critical factor for traders. A significant debt switch operation involving **₹25,000 crore** of government securities was scheduled for today. This move aims to convert short-term debt into longer-dated papers, effectively managing the government’s redemption profile for the upcoming fiscal years. Weekly issuance remains heavy, with state governments looking to raise nearly **INR 445 billion**. Simultaneously, the central government is proceeding with an auction of the 10-year benchmark bond totaling **INR 320 billion**. This steady flow of new paper has acted as a ceiling for price gains, keeping yields within a focused range of **6.65% to 6.78%**. Liquidity in the banking system is currently in a surplus of nearly **INR 3 trillion**, supported by the RBI’s proactive bond purchases and liquidity injection measures. These actions have been vital in absorbing supply pressures and mitigating the impact of tight funding conditions earlier in the month. Foreign institutional activity is being closely monitored as Indian bonds integrate further into global indices. The Indian Rupee has stabilized near the **90.71/$** level, providing a more predictable backdrop for international investors navigating the domestic debt market. Market participants expect yields to remain sensitive to global oil price movements and upcoming auction demand. While domestic macros remain strong, the persistent issuance overhang suggests that yields will likely drift sideways in the near term rather than experiencing a sharp downward breakout.