Live News CENTRAL_BANK ARTICLE H impact Oct 07, 2026, 07:25 AM UTC

India 10Y Yield Hits 2-Year High as RBI Tightens Policy

The yield on India’s 10-year G-Sec rose to around 7.23%, hitting more than two-year highs as investors weighed the RBI’s rate hike against persistent inflation risks, higher global bond yields, and elevated oil prices. The benchmark 6.94% 2036 bond yield gained 2 basis points, while the 10-year government bond yield later climbed 5 basis points after the RBI raised its repo rate by 25 basis points to 5.50%, the highest in a year and its first hike since February 2023. The move was in line with expectations and came as the central bank shifted its stance to “calibrated tightening,” with retail inflation reaching 4.8% in August after rising for 10 straight months. Markets are now watching for further liquidity tightening through additional debt sales or a modest increase in the cash reserve ratio. In September, the RBI sold INR 1 trillion ($10.39 billion) of bonds, the largest in at least a decade.

SquawkNews Desk 1 updates Updated Oct 07, 2026, 07:32 AM UTC

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07:32:21 AM UTC

SquawkNews

MUMBAI, Oct 7 (Reuters) — STOCKS: The benchmark BSE Sensex was down 0.47% at 72,722, while the broader NSE Nifty 50 fell 0.54% to 22,644, reversing some of the early declines after the RBI hiked rates by an expected 25 basis points and stayed away from additional measures to drain liquidity..BO Rupee: The Indian rupee was down 0.34% versus the US dollar at 96.7525, as rising oil prices add pressure while traders assess the Reserve Bank of India's rate hike and a shift in stance that signals a 'milder' form of tightening. INR/ Government Bonds: The benchmark 10-year bond was quoted at 98.0525 rupees, with the yield up 3 bps at 7.2221%, after the RBI delivered its first rate hike in nearly four years. IN/ Overnight Index Swaps: The one-year overnight index swap rate was down 2.25 bps at 6.2150%, while the five-year swap rate rose 2 basis points to 6.69%. Call Money: India's overnight call money rate was at 5.45%, and the overnight TREPS rate was at 5.20%. (Reporting by Khushi Malhotra) ((khushi.malhotra@thomsonreuters.com)

23%, hitting more than two-year highs as investors weighed the RBI’s rate hike against persistent inflation risks, higher global bond yields, and elevated oil prices. 50%, the highest in a year and its first hike since February 2023. 8% in August after rising for 10 straight months. Markets are now watching for further liquidity tightening through additional debt sales or a modest increase in the cash reserve ratio.

39 billion) of bonds, the largest in at least a decade.