(Updates to close)
By V. Ramakrishnan
MUMBAI, March 17 (Reuters) - Indian bond yields remained at
near their highest in three weeks on Monday as increasing price
pressures from high crude and food prices dimmed chances of an
interest rate cut in the near term, traders said.
The 10-year federal bond yield <IN079917G=CC> ended at 7.62
percent, unchanged from the previous close.
"Inflation is the main concern but recent trends show price
pressures won't ease anytime immediately," a dealer with a
private sector bank said.
Central bank governor Yaga Venugopal Reddy said on Friday the
monetary policy has already taken account of rising food and fuel
prices.
Annual inflation hit a nine-month high of 5.11 percent in
early March. The Reserve Bank of India wants to contain inflation
near 5 percent by end-March.
The central bank has kept its key lending rate unchanged at
7.75 percent for almost a year, after raising it five times
between June 2006 and March 2007.
Its next policy review is on April 29.
Overnight cash rates <INROND=> ended at 7.25-7.50 percent,
down from 8.25-8.50 percent on Friday as quarterly corporate tax
payments were out of the way.
The central bank conducted a special afternoon repo auction
on Monday to bridge any shortfall in cash with banks. It accepted
bids worth 42 billion rupees ($1 billion) in the 7-day auction,
ahead of a four-day weekend later this week and the tax payments.
The central bank held an additional repo auction and reverse
repo auction on Friday too.
($1 = 40.7 rupees)
(Editing by Ranjit Gangadharan)
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Keywords: MARKETS INDIA MONEY/