Foreign investors pared holdings in emerging markets in June due to fears of an early end to the US monetary stimulus.
India has been particularly vulnerable due a current account deficit that hit a record high of 4.8% of gross domestic product in the fiscal year ended in March.
The benchmark 10-year bond yield fell 12 basis points on the day, its biggest fall since June 3. Total volume on the central banks electronic trading platform was at R42,225 crore, little lower than the average 500 billion rupees seen until mid-June. The big gains on Friday allowed 10-year yields to end flat for the month, although bonds are still sitting on sizeable gains for the quarter, with yields down 51 basis points (bps) for the April-June quarter.