MUMBAI: Indian government bonds fell for a fifth straight session on Wednesday, as the rupee sank to another record low, sapping risk appetite ahead of the U.S. Federal Reserve’s rate decision. The local currency hit a fresh low of 92.63 per dollar, as the raging Middle East war sparked capital outflows and raised macroeconomic risks for Asia’s third-largest economy. Investor sentiment stayed weak, with the benchmark Brent crude still holding above $100 per barrel for a fifth day. However, oil prices pulled back modestly after Iraq resumed crude exports via pipeline to Turkey’s Mediterranean port of Ceyhan. The benchmark 6.48% 2035 bond yield settled 2 bps higher at 6.7330%, compared with Tuesday’s close of 6.7143%. Bond yields move inversely to prices. The Indian debt and currency market will remain shut on Thursday for a local holiday. READ MORE: India bonds unchanged as elevated oil, heavy state supply keep up pressure “We expect bond yields to continue to trade in a range, though demand from real money investors is likely to help long-duration bonds, which are at attractive valuations,” said Puneet Pal, fixed income head at PGIM India Mutual Fund. India’s 15-40 year bonds were flat-to-lower on Wednesday as traders saw value at current levels. Immediate focus will now be on U.S. Federal Reserve’s rate decision due later in the day, in which the Fed is universally expected to hold the policy rate steady. The Fed is unlikely to hike rates this week over surging oil prices, but the risk may still surface as the Iran conflict overshadows the meeting. The 10-year U.S. Treasury yield moved lower, last down 2 bps at 4.1790%. Rates India’s overnight index swap (OIS) traders abandoned receiving positions after the rupee sank to a record low. The one-year OIS rate rose 2.25 bps to 5.8150% and the two-year OIS rate was up 3.25 bps to 6.0225%. The five-year swap rate jumped 4.25 bps to close at 6.42%.