MUMBAI ) - Indian government bond yields held steady on Monday due to the lack of fresh triggers, especially the timing of the Reserve Bank of India's planned auctions-based debt sale.

The 10-year benchmark bond yield closed at 7.3701%, after ending at 7.3576% in the previous session.

The RBI sold bonds worth 41.75 billion rupees (nearly $502 million) for the week ended Oct. 20, data showed, which was the highest for any week since December 2022, including well above the 7.80 billion rupees of sales in the previous week.

"Thus it seems it is a matter of time before the RBI formally announces the conduct of OMO sales," said Puneet Pal, head-fixed income at PGIM India Mutual Fund.

"When the banking system liquidity is already tight, with overnight lending rates hugging the MSF rate of 6.75%, it indicates the RBI is giving a yield signal, apart from sucking out liquidity."

Earlier this month, RBI Governor Shaktikanta Das said the central bank aims to sell bonds via auctions to suck out the liquidity surplus in the banking system.

While the market expects around 500 billion rupees of such sales this quarter, investors have been on the edge, unsure of when such sales may start.

The market is looking for some clarity, with the RBI likely to meet some senior officials on Nov. 2-3 to discuss the prevailing liquidity conditions.

Last week, Reuters reported the central bank will start the OMO sales once government spending picks up and the durable liquidity surplus improves.

Meanwhile, traders also await the U.S. Federal Reserve's policy decision on Wednesday.

While the Fed is expected to keep rates unchanged, Chair Jerome Powell's commentary will be eyed for further guidance on the rate trajectory. ($1 = 83.2200 Indian rupees)

(Reporting by Bhakti Tambe; Editing by Savio D'Souza)