India’s bonds gained for the first time in four days before a central bank buyback of debt tomorrow from banks and securities companies. Yields on notes due in 2018 retreated from near a two-month high on speculation purchases by the Reserve Bank of India will boost cash in the banking system and give investors more money to buy securities. The yield on the 8.24 percent bond declined 3 basis points to 6.45 percent as of 10:21 a.m. in Mumbai, according to the central bank’s trading system. The price rose 0.22 per 100 rupee face amount to 112.22. The note’s yield has climbed 1.6 percentage points from a record low of 4.85 percent reached last month as the government unveiled record borrowing for the current fiscal year to fund economic stimulus packages. It rose as high as 6.57 percent yesterday. The Reserve Bank said on Feb. 10 that it will buy debt through auctions for “more effective liquidity management.” The cost of five-year swaps, or derivatives contracts used to guard against rate fluctuations, was little changed from yesterday. The rate, a fixed payment made to receive floating rates, was 4.93 percent.

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