Indian bond yields seen with an upside bias

By Dharamraj Dhutia Mumbai, May 20 (Reuters) – The Indian government bonds are expected to be open on Tuesday with a marginal bias bias, a day after the central bank bought less than scheduled quantum of bonds, causing the sales pressure. The return on the new measure ripening in 2035 is expected to move between 6.22%and 6.26%, a trader with a private bank said, compared to the previous closure of 6,2382%. The 2034 bond yield ended at 6.2904%. The Reserve Bank of India bought bonds worth 192.03 billion rupees ($ 2.25 billion) on Monday, less than 80% of its targeted 250 billion rupees. It was also the last scheduled purchase of open market bonds according to the calendar of the central bank. “There was some response to the fact that the RBI chose not to go for the full quantum because they may have wanted to avoid the yield signal, which led to a sale,” the trader said. The RBI has bought bonds worth 1 trillion rupees over the past two weeks, which followed 3.65 trillion rupes purchases in the first four months of 2025. It also bought bonds worth 388 billion rupees through the secondary market in January. Traders will now focus on the quantum of RBI’s dividend payment to the government, which is expected to be announced soon. Economists expect the central bank to transfer a record surplus this year, with Citi, who estimated it in the vicinity of 3.5-4 billion rupees in the previous year, sharply higher than 2.1 billion rupes. Rates India’s overnight index exchange (OIS) rates rose slightly on Monday and is expected to remain in a narrow series on Tuesday. The one-year EIA rate was 5.63%, the two-year OIS rate was 5.53%, while the most liquid five-year ois rate finished five BPs higher at 5.71%. Important Indicators: ** Brent Ru futures were 0.1% higher at $ 65.60 a barrel, after rising 0.2% in the previous session ** Ten years US Treasury yield at 4.4493%; Two years of return on 3.9765% ** Indian states aimed at raising 148 billion rupes through mortgage sale ** RBI to run a first time a repo auction for 250 billion rupees ($ 1 = 85,4080 Indian rupees) (Reporting by Dharamraj Dhutia by Eileen Soreng)