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(Bloomberg) — Sovereign bonds in India fell after the minutes of the central bank’s interest rate-setting panel meeting showed its members have turned more hawkish over inflation, pushing back bets on further rate cuts.

The yield on the new 5.77% 2030 bond rose five basis points to 6%, after gaining 18 basis points in the previous two weeks. Traders are watching for demand at a 300 billion rupee bond sale on Friday after last week’s auction of the new benchmark 10-year paper had to be rescued by underwriters.

The rate panelists fretted over a recent surge in consumer inflation, preferring to wait for price pressures to wane before considering more steps to address the “deepest contraction in history,” minutes of the Monetary Policy Committee’s Aug. 4-6 meeting published Thursday showed. The fading rate cut hopes come even as the central bank is yet to show its hand on further bond purchases to help ease a record 12 trillion rupees supply in the fiscal year.

“We now believe we are at the end of the rate cut cycle and expectations of large cuts must be anchored (ideally 25, base case 50) as inflation is unlikely to materially decline from the current levels,” Soumya Kanti Ghosh, group chief economic adviser at State Bank of India, wrote in a note. “We believe it would better serve the financial markets if RBI continues to resort to unconventional policy measures.”

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