Indian bonds fell after the Reserve Bank of India said it will sell sovereign bonds to withdraw 1 trillion rupees (about $10.5bn) of cash from lenders — its most aggressive step to absorb excess system liquidity and guard against inflation. The move added to supply pressure in a year already strained by record government borrowing; 5‑year yields rose as much as 13bps and the 10‑year climbed 6bps. Higher oil prices are amplifying inflation risk and have increased the likelihood of an RBI rate hik

Indian bonds fell after the Reserve Bank of India said it will sell sovereign bonds to withdraw 1 trillion rupees (about $10.5bn) of cash from lenders — its most aggressive step to absorb excess system liquidity and guard against inflation. The move added to supply pressure in a year already strained by record government borrowing; 5‑year yields rose as much as 13bps and the 10‑year climbed 6bps. Higher oil prices are amplifying inflation risk and have increased the likelihood of an RBI rate hike next month. Federal borrowing over the next six months is near 8 trillion rupees, coinciding with a heavy period of state bond issuance. Indian debt joined a global selloff driven by inflation and supply concerns. Markets were closed Monday for a public holiday.