India's sovereign bond yields have experienced an uptick following the Reserve Bank of India's (RBI) announcement to withdraw up to ₹2 trillion (approximately $21.6 billion) in liquidity through a seven-day variable rate reverse repo auction. This marks the RBI's first liquidity withdrawal move this year and comes as the central bank aims to push overnight borrowing costs closer to its policy rate. The 10-year benchmark yield rose by 4 basis points to reach 7% after the announcement. As of Thursday, banks held a surplus cash of ₹4.3 trillion, prompting RBI Governor Sanjay Malhotra to clarify that while borrowing costs had drifted lower, it was not an indication of an impending rate reduction. Experts, including Gopal Tripathi, head of treasury at Jana Small Finance Bank, noted that the auction would help absorb excess funds, leaving banks with a surplus of about ₹1.5 trillion to ₹2 trillion. Predictions suggest that the 10-year yield may stabilize within a range of 6.75% to 7.10%.