MUMBAI: Indian government bonds were barely changed in early deals on Friday, with traders holding back ahead of the central government’s last debt auction of 2025, where demand and cutoffs will likely drive the near-term direction. The benchmark 10-year yield was at 6.5539% as 0f 10:00 a.m. IST after ending at 6.5398% on Wednesday. Bond yields rise when prices fall. New Delhi will raise 320 billion rupees ($3.56 billion) through sale of three-year, seven-year and 30-year bonds in the first auction after the central bank’s jumbo liquidity infusion announcement. “Auction cutoffs would be the real test whether the recent rally has some legs or it was just a knee-jerk reaction to the central bank’s plan,” trader with a state-run bank said. On Wednesday, the 10-year bond yield posted its biggest single session drop in over seven months as the Reserve Bank of India said it will infuse about 2.90 trillion rupees ($32.35 billion) into the banking system over the next one month. This will include four tranches of open market bond purchases worth 500 billion rupees each for the next four weeks and a $10 billion three-year dollar-rupee buy/sell swap in January. Over 2025, the RBI has bought bonds worth 6.5 trillion rupees, a record high, and infused 4.7 trillion rupees through FX swaps and slashing the cash reserve ratio for banks. Bond market participants believe the hefty infusion opens the door for sustained gains in government bond prices, as well as in ensuring banking system liquidity stays at an optimal level, allaying concerns of a jump in borrowing costs.