10-year bond fell for a second day after the government said its weekly debt sales are unlikely to drop below $3.1 billion. The yield on the 6.9 % note due July 2019 rose two basis points to 6.85 %.
The price fell 0.17, or 17 paise per 100 rupee face amount, to 100.33. A basis point is 0.01 percentage point. Yields on benchmark notes due 2019 rose as Finance Secretary Ashok Chawla said the government will ?frontload? its planned debt offers, referring to a practice of scheduling more bond auctions in the early months of the financial year. India last week raised its borrowing target for the fiscal year ending March 31 by 25% to a record Rs 4.51 trillion to bridge a widening budget deficit.
?Bonds aren?t finding sustained demand because there?s much uncertainty about the government?s borrowing schedule in the coming weeks,? said Arvind Sampath, head of interest-rate trading in Mumbai at Standard Chartered Plc. ?Excessive frontloading of bond auctions may damp investor sentiment.?
The rupee appreciated 0.6% to 48.645 . Eight of the 10 most-traded currencies in Asia outside Japan advanced against the dollar. Offshore forwards contracts indicate traders predict the rupee will decline to 48.73 in a month, compared with expectations for a rate of 49.09 on Tuesday. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are used for currencies that aren?t freely convertible and are settled in dollars.