The Reserve Bank of India said on Tuesday it will buy back the 8.07 percent 2017, 7.80 percent 2021, 8.08 percent 2022 and 8.28 percent 2027 bonds.

At 9:18 a.m. (0348 GMT), the benchmark 10-year bond yield at 8.33 percent, 1 basis point lower than 8.34 percent at previous close. It is expected to move in a 8.32 percent to 8.37 percent range during the day, traders said.

Primary inflation data is expected to come down and boost sentiment, said Sandeep Bagla, senior vice president at ICICI Securities Primary Dealership.

Focus will shift later in the session towards the auction slated for Friday, where demand might not come in at current yield levels, Bagla added.

A dampener is the liquidity deficit in the banking system which stood at 1.65 trillion rupees ($31.42 billion) on Wednesday, far above the RBI's comfort level of about 600 billion rupees, traders said.

The government is set to sell 40 billion rupees of 7.83 percent 2018 bond, 50 billion rupees of 8.79 percent 2021 bonds and 30 billion rupees of 8.97 percent 2030 bond on Friday.

The RBI on Wednesday allowed banks to access funds from the central bank's marginal standing facility against their excess holdings in government bonds and other approved securities.