The Reserve Bank of India cancelled a scheduled bond auction on Friday, triggering a rally in the bond yields, where climbed 18-month high a day earlier amid concerns that augmented federal borrowing could cause the government to miss fiscal deficit target.

The central bank did not accept any bids for two series of sovereign bonds with four and 13-year maturities, auctioned on Friday for Rs 11,000 crore collectively. Bids received were not as per expectation of RBI, dealers said. The benchmark yield dipped 13 basis points to 7.27% Friday after RBI accepted bids for less than a third of the number of bonds being sold at the auction. The bid cancellation has helped arrest spiking yields. Bond yields and prices move in opposite directions.

“Impact of RBI’s auction cancellation would not last long,” said Naveen Singh, senior vice-president at ICICI Securities Primary Dealers. “The government has to ultimately borrow the money during this fiscal year.”

A week ago, bond houses or primary dealers rescued similar government bond auction by buying unsold sovereign securities worth Rs 2,325 crore amid rising bond yields.

Earlier in November immediately after India’s sovereign rating upgrade by Moody’s, a global rating company, the central bank scrapped plans to sell bonds in the open market to absorb excess liquidity setting off speculation that the regulator was not keen on yields beyond 7% despite good news like a sovereign rating upgrade.