RBI may sell inflation-linked bonds at 1.7 percent: poll

MUMBAI (Reuters) - The Reserve Bank of India (RBI) is expected to sell 10 billion rupees worth of inflation-linked bonds at a real yield of 1.7 percent over the wholesale price inflation rate later on Tuesday, a Reuters poll of 15 banks and primary dealers showed.

The highest forecast in the poll was for a real yield of 2 percent, while the lowest was 1.35 percent.

The debt will be indexed to the final wholesale price inflation with a four-month lag, meaning Tuesday's auction will be extrapolated from January's final WPI of 7.31 percent.

Primary dealers and insurance companies are likely to be the main buyers of these bonds, the Reuters survey showed.

The auction marks India's first sale of inflation-linked bonds since a failed attempt in 1997. India plans to sell up to 150 billion rupees of the debt during the current fiscal year ending in March 2014.

(Reporting by Swati Bhat and Subhadip Sircar; Editing by Rafael Nam)