Bond yields to stabilise soon: Garg

The recent spike in government bond yields is not driven by fundamentals and will soon come back to normalcy, economic affairs secretary Subhash Chandra Garg on Friday here said.

Bond yields have been elevated in the past few months due to higher crude prices and external market environment.

The 10-year government bond yield--7.17 per cent2028—is trading at 7.83 per cent.

"The yields on Tuesday are possibly not justified on fundamentals, and therefore, as things get mature and stabilise, they will come back to normal," Garg said.

The rise in yields is on account of fiscal concerns, surge in oil prices, and spike in US treasuries, he said adding, "but all of them are stabilising and settling down."

He said government is issuing more floating rate bonds as there is lot of demand for them.