India bond yields rise; central bank report puts rate cut in doubt

MUMBAI: Indian bond yields rose on Tuesday after a central bank report saying sustained fiscal consolidation was needed to create room for monetary easing raised doubts about whether it would cut interest rates later in the day as widely expected.

The 10-year bond yield rose 3 basis points to 7.89 percent in early trading.

The Reserve Bank of India said a sustained commitment to contain the fiscal and current account deficits was needed to create room for monetary easing in its macroeconomic report released on Monday after trading hours.

The RBI was widely expected to cut interest rates by 25 basis points. Its decision will be announced at 0530 GMT.