MUMBAI, Aug 21 (Reuters) -

Indian government bond yields and the rupee will track U.S. Treasury yields this week, with the Reserve Bank of India's (RBI) resolve to prevent the currency from sliding further and movements in the Chinese yuan acting as crucial triggers.

The rupee last week came within a whisker of its record low of 83.29 hit in October 2022. The RBI's likely

intervention

in both offshore and onshore trading prevented that. It ended at 83.10 on Friday.

A jump in U.S. yields dragged the currency down about 0.3% in the week. Long-maturity U.S. yields have been surging on bets that resilient U.S. economic data may mean that the U.S. Federal Reserve is not done hiking rates.

"Monitor two critical indicators: the 10-year U.S. yield and USD/CNH," Anindya Banerjee, head research - FX and interest rates at Kotak Securities said.

The RBI "seems actively engaged" in limiting the upside on USD/INR, he said, which probably "puts a ceiling" on the potential upside.

The offshore Chinese yuan last week dropped to its lowest since November 2022, weighed by the U.S. and China interest rate deferential and China's sputtering economy.

The Chinese central bank, like the RBI, possibly sold dollars via major state-owned banks last week to slow the pace of the yuan's decline, traders said.

Meanwhile, the benchmark 7.26% 2033 bond yield ended at 7.2172% on Friday. It rose two basis points (bps) last week, extending an aggregate growth of 12 bps in the prior three weeks.

Traders expect the benchmark bond yield to be in the 7.18%-7.28% zone this week.

The recent climb in yields is due to the relentless spike in U.S. yields, while a jump in local retail inflation also added to concerns of rates remaining elevated for longer.

The 10-year U.S. yield hit levels seen 10 months ago last week, and posted a fifth consecutive weekly rise.

Retail inflation in July spiked to 7.44% from 4.87% in the previous month, the highest since April 2022 and breaching the upper end of the RBI's tolerance band of 2%-6% for the first time in five months.

Overnight index swap markets have since factored in one more rate hike from the RBI, though bond markets do not expect it.

Meanwhile, Ashhish Vaidya, managing director and head of treasury and markets at DBS Bank India expects benchmark bond yield to not rise much beyond 7.25%.

He expects the bond yield curve to steepen over the medium term as elevated inflation will fall back within the central bank's comfort zone in a few months. KEY EVENTS: ** U.S. July existing home sales - Aug. 22, Tuesday (7:30 p.m. IST) ** U.S. July new home sales - units Aug. 23, Wednesday (7:30 p.m. IST) ** U.S. July durable goods Aug. 24, Thursday (6:00 p.m. IST) ** U.S. initial weekly jobless claims week to August 14 - Aug 24, Thursday (6:00 p.m. IST) ** Minutes of RBI's August meeting - Aug. 24, Thursday (5:00 p.m. IST) ** Fed Chair Jerome Powell to deliver talk at Jackson Hole, Wyoming - Aug. 25, Friday (7:35 P.M. IST) (Reporting by Nimesh Vora and Dharamraj Dhutia; Editing by Nivedita Bhattacharjee and Varun H K)