Government bond yields experienced a decline on Friday, with the benchmark 10-year yield settling at 6.94%, down from 6.95%. The initial increase in yields was influenced by rising crude oil prices, which surpassed $107 per barrel, and higher US Treasury yields. However, a rally was triggered later in the day following news of a potential visit from Iran to Pakistan. The government successfully auctioned ₹32,000 crore in government securities, with strong performance noted in the three-year segment and aggressive bidding on longer maturities. Meanwhile, the Indian rupee continued to face pressure, falling 0.16% to 94.26 against the US dollar and marking its largest weekly drop since September 2022. This depreciation is attributed to a combination of rising oil prices and a loosening of currency regulations by the Reserve Bank of India (RBI), leading to cautious investor sentiment. The overnight weighted average call rate (WACR) also softened to 5.12%, reflecting changes in liquidity conditions in the banking system.