Bond yields hold at six-week high on inflation

Ten-year bond yields were at the highest level in more than six weeks, before a government report that may show the rate of inflation in September held at the same pace as the previous month.

RBI has increased its benchmark policy rates five times this year to curb gains in consumer prices. Official data on Friday may show the wholesale price index climbed 8.5% from a year earlier.

“Not many are punting that inflation will cool in the coming weeks,” said Krishnamurthy Harihar, treasurer at FirstRand in Mumbai. “It looks certain the central bank will increase rates next month." The yield on the 7.80% note due May 2020 was little changed at 8.01%, the highest level since August 26, at the close of trade on Wednesday.

The price was at 98.58 rupees per . 100 face amount. The cost of 1-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 three b s to 6.66%.