India's 10-year benchmark bond yield was at 7.23%, after rising to 7.25% in early trade. The yield had dropped 25 basis points in the last nine sessions, closing at 7.19% on Tuesday.
Meanwhile, the rupee depreciated 27 paise to 78.80 against the US dollar in opening trade on Wednesday, tracking a muted trend in domestic equities. The rupee opened higher at 78.70 against the US dollar, then fell to 78.80 against the greenback, registering a decline of 27 paise over the last close.
Meanwhile, Indian shares opened slightly higher on Wednesday, with metal, energy and information technology stocks gaining, as investors eye the central bank's policy meeting outcome expected later this week.
Foreign institutional investors remained net buyers in the capital market on Tuesday as they purchased shares worth ₹825 crore, as per exchange data.
India's exports dipped, though marginally, for the first time in 17 months in July, while the trade deficit tripled to a record $31 billion, fuelled by over a 70% rise in crude oil imports.
On Tuesday, two US Federal Reserve officials signalled that the central bank remained committed to hiking interest rates to a level that would further curb economic activity, pushing U.S. 10-year yields 14 bps higher.
The RBI monetary policy committee's decision is due on Friday, with views on the quantum of rate increase widely split between 25 basis points and 50 basis points, according to a Reuters poll of economists.
As of now, the RBI has increased the repo rate by 90 basis points since May this year as opposed to the US Fed, which has increased its key rate by 225 basis points to combat persistent inflation.
(With inputs from agencies)
