Traders attributed the announcement to a likely cash surplus in the system, due to the RBI's forex intervention and government spending.
The benchmark 10-year bond yield was up 10 basis points at 7.90 per cent by 0345 GMT, while the most traded 8.40 per cent 2024 bond yield was 11 basis points higher at 8.07 per cent.
The rise in yields, if sustained, would be the biggest single-day rise since June 2. Traders said the expectation of a string of open market sales of bonds going ahead was unsettling investors.
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