Indian government bonds opened weaker on October 7 as market participants remained cautious ahead of the Reserve Bank of India monetary policy committee review, which will determine the central banks next interest rate decision.

The benchmark 10 year government bond yield was trading at 7.2106 percent, compared with 7.1928 percent in the previous session, indicating a rise of around two basis points.

The RBI monetary policy meeting has taken centre stage for the bond market as investors assess the central banks outlook on interest rates, inflation and economic growth. The policy decision is expected to provide further direction to bond yields and interest rate sensitive assets.

The movement in yields reflects a cautious stance among investors ahead of the policy announcement, with market participants assessing the potential implications of the RBI decision for borrowing costs and the broader fixed income market.

Higher government bond yields generally indicate lower bond prices and can influence funding costs across the economy. The RBI policy outcome will therefore remain an important near term trigger for the government securities market.