India’s newly issued 10-year sovereign bonds headed for a weekly decline as the nation prepared to auction more of the debt. The government plans to sell 140 billion rupees ($2.3 billion) of bonds today, including an additional 90 billion rupees of the new 2024 debt first auctioned last week, according to the central bank. It sold 70 billion rupees of the notes on July 25 with the coupon set at 8.4 percent. BSE Ltd. will introduce interest-rate futures based on these securities, the stock exchange said in a statement yesterday. The yield on the 8.4 percent notes due July 2024 climbed 11 basis points, or 0.11 percentage point, this week and one basis point today to 8.50 percent as of 10:18 a.m. in Mumbai, according to the central bank’s trading system. The rate on the 8.83 percent bonds due November 2023, the previous 10-year benchmark, rose six basis points this week to 8.73 percent. “The spike in yields isn’t surprising because, at the cut-off of 8.40 percent, the new 10-year bond was priced aggressively,� said Vijay Sharma, executive vice president for fixed income at PNB Gilts Ltd. in New Delhi. “The increased issuance has in part helped normalize the yields.� The Reserve Bank of India will probably keep its benchmark repurchase rate unchanged at 8 percent at an Aug. 5 policy meeting, according to 30 of 31 economists surveyed by Bloomberg. One-year interest-rate swaps, derivative contracts used to guard against swings in funding costs, fell four basis points from July 25 to 8.38 percent, data compiled by Bloomberg show. They were little changed today. To contact the reporter on this story: Shikhar Balwani in Mumbai at sbalwani@bloomberg.net To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Robin Ganguly, Simon Harvey

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