MUMBAI: Indian bond yields could rise on Monday as investors pare positions before the government issues its borrowing calendar for April-September this week.
The government has set gross market borrowings at 5.7 trillion rupees ($111.34 billion) for the fiscal year beginning in April, higher than an expected 5.3 trillion rupees. Much of the borrowings could happen in the first half of the year.
The possibility of an increase in retail fuel prices could also weigh on bond prices because of its impact on inflation, traders said.
Central bank sources told Reuters on Friday the Reserve Bank ofIndiais not uncomfortable with the recent surge in bond yields and is unlikely to use debt buys through open market operation as a tool to contain the drop in bond prices.
The 10-year benchmark bond yield should open around 8.39 percent after a three-day weekend and move between 8.38 percent and 8.45 percent, traders said. It closed down 1 basis point at 8.38 percent on Thursday.
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