MUMBAI - India's benchmark bond yield posted its biggest monthly drop in six in November, tracking a plunge in U.S. Treasury yields, as investors turn to central bank monetary polices in the last month of the year.

The 10-year benchmark bond yield ended at 7.2803%, down eight basis points in November, the biggest drop since May.

"The sudden drop in Treasury yields in November has led to similar movement in Indian bond yields, though the magnitude is not similar," said VRC Reddy, treasury head at Karur Vysya Bank.

"For the next month, the Reserve Bank of India and Federal Reserve's monetary policy decision would be the key triggers," Reddy added.

U.S. yields plummeted in November, as softer inflation reading and dovish commentary from Federal Reserve officials reaffirmed bets that the central bank will not hike rates anymore, with focus shifting to rate cuts in first half of 2024.

The 10-year U.S. yield was at 4.30%, down 58 basis points so far in November, and was set to post biggest monthly drop in 12 years. In the last six weeks, it has dropped by nearly 75 basis points from its peak of over 5%.

Traders are now pricing over 45% probability of the Fed cutting rates in March, and around 80% probability in May.

The Fed's policy decision is due in middle of December, with major focus on the guidance, while the Reserve Bank of India's (RBI) policy decision is due on Dec. 8.

The RBI is expected to stand pat on rates, but its stance on liquidity would be the key driver for markets, especially after it announced sale of bonds via auction in its previous monetary policy, but did not conduct any such sale.

Traders also await a decision regarding the inclusion of Indian bonds in the Bloomberg Global Aggregate index, which could lead to further foreign inflows.

India's gross domestic product (GDP) growth is forecast to have moderated to 6.8% in July-September from 7.8% in the previous quarter, according to a Reuters poll, and the data is due later in the day.

(Reporting by Dharamraj Dhutia; Editing by Varun H K)