Aug. 23 (Bloomberg) -- India’s 10-year bonds fell for a fifth day on speculation the central bank will raise borrowing costs again to combat inflation that has stayed near 10 percent since February. Yields rose to their highest level in more than three months before a sale of 120 billion rupees ($2.6 billion) of government bonds this week, part of the finance ministry’s record 4.57 trillion rupee borrowing program for the fiscal year that began in April. The Reserve Bank of India, which has increased benchmark interest rates four times this year, will review its policy next on Sept. 16. “Inflation continues to be a concern, and more rate hikes may be in store,” said Roy Paul, deputy general manager at Federal Bank Ltd. in Mumbai. “Debt supplies are also continuing unabated.” The yield on the 7.80 percent bond due in May 2020 rose four basis points, or 0.04 percentage point, to 8.02 percent as of 10:06 a.m. in Mumbai, according to the central bank’s trading system. The rate touched 8.05 percent, the highest level since May 3. The price fell 0.30, or 30 paise per 100 rupee face amount, to 98.50. The nation’s benchmark wholesale-price index advanced 9.97 percent in July from a year earlier, after a 10.55 percent gain in June, the commerce ministry said Aug. 16. The cost of one-year interest-rate swaps, or derivative contracts used to guard against fluctuations in borrowing costs, increased. The rate, a fixed payment made to receive floating rates, rose to 6.28 percent from 6.26 percent at the end of last week. --Editors: Ven Ram, Andrew Janes To contact the reporter on this story: V. Ramakrishnan in Mumbai at rvenkatarama@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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