The Bank of India said it will sell treasury bonds to recover the liquidity of the banking system. In a year when the scale of government borrowing reached a record and the market was already under pressure, the supply of bonds increased further, and the price of Indian bonds fell accordingly. Domestic bonds were involved in a wave of global sell-offs. The yield on India's 6.94% bond due in 2036 rose 7 basis points to 7.09%; the yield of 6.36% bonds due in 2031 rose 16 basis points to 6.78%. The Indian rupee weakened at the same time, high oil prices dragged down the country's finances, and the central bank intervened to support the exchange rate. The Indian market was closed on Monday due to public holidays. The Reserve Bank of India announced on Friday evening that it will return 1 trillion rupees of funds from the banking system through a bond sale. This is the bank's most vigorous operation so far to absorb excess liquidity in the banking system, where there is a risk of inflation. The new supply of bonds has further worsened the outlook for the bond market. At the same time, high oil prices are boosting the risk of inflation and increasing the possibility that the Reserve Bank of India will raise interest rates next month. The federal government plans to issue bonds close to 8 trillion rupees in the next six months, and this period is usually also the peak period for local government debt issuance.

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