New Delhi, Oct. 3 -- Indian government bond yields have surged "only partially" due to higher global energy prices and global bond yields, reflecting prudent fiscal management, credible monetary policy and easing structural inflation pressures, said RBI Governor Sanjay Malhotra.

Addressing the 5th Kautilya Economic Conclave, Malhotra said mark-to-market losses on sovereign bonds could weaken balance sheets, particularly at a time when fiscal pressures may limit governments' ability to support troubled banks.

At the same time, emerging markets, especially those with high levels of sovereign debt held by non-residents, could face capital outflows as carry trades unwind, he noted.

For India, "Indian government yields have risen only parti...