MUMBAI: Indian bond yields edged higher while the rupee weakened on Wednesday, tracking a sharp rise in global crude oil prices that threatens to push up domestic inflation and widen the country's current account deficit.

Oil prices rose as sanctions on Russian banks following Moscow's invasion of Ukraine hampered trade finance for crude shipments and some traders opted to avoid Russian supplies in an already tight market.

The benchmark 10-year bond yield edged up to 6.80%, up 3 basis points from its previous close on Monday. It touched 6.81% in early trade, the highest since Feb. 9. Markets were closed on Tuesday for a local holiday.

Traders said if there are no more debt sales in this fiscal year, yields are likely to trade in a 6.75% to 6.85% range depending on the movement in global crude and the evolving geopolitical situation.

India imports more than two-thirds of its oil requirements and rising crude will push up imported inflation while also widening the country's current account deficit.

The partially convertible rupee was trading at 75.63/64 per dollar, weaker compared to its previous close of 75.34. It dropped to a low of 75.7725, its weakest since Dec. 20.

Indian shares fell after data showed the country's economic growth missed estimates, with the escalating Ukraine crisis and surging crude oil prices also weighing.

"With a cloud of uncertainty now cast over the timing of the LIC IPO, the pair could move towards 76+ levels if the IPO is pushed to the next fiscal," analysts at HDFC Bank wrote in a note.

"The 10-year benchmark yield is likely to trade in the range of 6.75-6.8% in the near term," they added.

Bankers advising Indian state-run Life Insurance Corp (LIC) on its IPO have pushed the government to defer the launch of the stock offering in the wake of the market jolt caused by Russia's invasion of Ukraine, two sources familiar with the talks told Reuters. (Reporting by Swati Bhat; editing by Uttaresh.V)


Reuters