India short-term bonds and money market rates have benefitted from an expected liquidity boost due to the withdrawal of the nation’s highest denomination currency note. This influx could support the rally in rupee government bonds, which had been dampened by the central bank’s lower-than-expected dividend payout to the government. India’s 5Y bond yields fell by as much as ten bps to 6.86%, while 10Y yields declined to 6.98%, resulting in a steeper curve.