MUMBAI - Indian government bond yields ended flat on Friday after a debt auction added to supply, but the yields were marginally down for the week tracking a sharp decline in U.S. peers.

The benchmark 7.26% 2033 bond yield ended at 6.9823%, after closing at 6.9824% in the previous session. The yield, however, ended the week 3 bps lower. The 10-year U.S. yield was 21 bps lower for the week at 3.61%.

Earlier in the day, New Delhi raised 330 billion rupees ($4.04 billion) through the sale of government bonds, which also included 140 billion rupees of the benchmark paper. The bonds were sold at cutoffs largely in line with market expectations.

"Traders are already very long as there has been a lot of buying in the past few days. At these levels, there is not much interest to add further," said Rajeev Pawar, head of treasury at Ujjivan Small Finance Bank.

Focus now shifts to the outcome of the Reserve Bank of India's monetary policy due on June 8. It had surprised the market with a pause in the rate hike cycle in April.

According to a Reuters poll of economists, the RBI will leave key interest rate unchanged at 6.50% on June 8 and for the rest of 2023 as it waits to see the economic impact of a series of hikes over the past year.

All 64 economists in the poll conducted between May 16 and May 29 expected no change to the 6.50% repo rate.

Despite hitting an 18-month low of 4.70% in April, inflation is not expected to fall to the RBI's 4% medium-term target for at least another two years, suggesting rate cuts are unlikely in the immediate future, according to the poll. ($1 = 82.3000 Indian rupees)

(Reporting by Bhakti Tambe and Dharamraj Dhutia; Editing by Sohini Goswami)