MUMBAI - Indian government bond yields started the last week of 2023 on a flattish note, with traders staying on the sidelines as they awaited fresh triggers in the new calendar year.

The 10-year benchmark bond yield was at 7.1782% as of 10:00 a.m. IST on Tuesday after closing at 7.1862% in the previous session.

The yield rose last week as traders booked profit after a sharp drop in the preceding week and as they moved towards the end of the quarter and calendar year. Indian markets were shut on Monday for Christmas.

"Most banks are done with their trading books for the quarter and year-end phenomena are further leading to lack of any sort of depth in the market," a trader with a primary dealership said.

The minutes of the central bank's latest meeting did not provide any new trigger and were seen as a reiteration of the policy commentary.

India's monetary policy committee (MPC) will remain vigilant of inflation risks, with the overall outlook remaining clouded by volatile and uncertain food prices, the committee members said in the minutes of the December policy meeting, released on Friday.

Retail inflation rose to 5.55% in November, its fastest pace in three months, due to higher food prices.

Earlier this month, the MPC kept the repo rate unchanged at 6.50% for the fifth consecutive time.

Meanwhile, Indian states aim to raise 248.49 billion rupees ($2.99 billion) through a sale of bonds later in the day, in the last auction of the quarter.

U.S. yields remained lower, with the 10-year yield near the 3.90% mark in Asian hours, after data showed inflation as measured by the personal consumption expenditures (PCE) price index fell 0.1% last month after being unchanged in October.

In the 12 months through November, the PCE price index increased 2.6% after rising 2.9% in October. ($1 = 83.1225 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Sohini Goswami)