The bonds in India surged up after the surprise move by India's Central Bank - RBI to keep the repo rate and short-term lending rate intact without any change. Currently, the policy rate stands at 6.5 percent.

The RBI in a statement mentioned that the committee shifted to 'calibrated tightening stance'. Out of the six members in the Monetary Policy Committee, four members voted in favour of the status quo. The committee headed by RBI Governor, Urjit Patel opted to take a pause this time and it is most likely that there is more possibility to increase interest rates in the coming quarters.

The latest move by RBI has led to the fall in the rupee value to tumble further to touch a lifetime record low of 74.10 per dollar after gaining marginally by 6 points during today's early trade session.

The rise in minimum support price for agri-commodities in domestic market added with rising crude in the global scenario has already triggered inflation concerns in the country.

The yield on the benchmark of the 10-year bond slipped by 10 basis points to settle at 8.05 percent during the trading session.

RBI had announced hikes for two times in a row during current fiscal and most of the analysts expected the third one amid the sliding rupee and rising bond yields. The rupee's performance is worst amongst the other Asian currencies amid the widening of current account deficit of India by a greater margin due to the surge in crude prices.

Last month, the sovereign bond yields hit a four-year high owing to rallying crude in the global market and rising concerns over tightening of domestic liquidity situation.