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RBI May Raise Repo Rate as Inflation and Yields Persist
A report from Union Bank of India says India’s central bank may make borrowing more expensive.
It could raise its main interest rate by 25 basis points in October 2026.
The report says more increases may happen during FY27.
It points to continuing worries about rising prices, costly crude oil and higher bond yields around the world.
If rate increases continue, the rate could reach 5.75 to 6 per cent.
Higher rates may also push up government bond yields.
The report highlights the yield on the 10-year government bond in particular.
These are forecasts, not announced decisions.
A Union Bank of India report says the RBI could raise the repo rate by 25 basis points in October 2026.
The report says further rate hikes may follow during FY27.
Persistent inflation concerns, elevated crude oil prices and higher global bond yields are cited as potential reasons for tightening.
If the hiking cycle continues, the repo rate could move toward 5.75–6 per cent.
Further rate increases could put pressure on government bond yields, especially the benchmark 10-year G-Sec yield.
- Who
- The Reserve Bank of India, as discussed in a Union Bank of India report.
- What
- A possible 25-basis-point repo rate increase, with further hikes potentially taking the rate toward 5.75–6 per cent.
- Where
- India.
- When
- October 2026, with possible further increases during FY27.
- Why
- The report cites persistent inflation concerns, elevated crude oil prices and higher global bond yields.
Key facts
- Forecast source
- Union Bank of India report
- Possible October move
- 25 basis points
- Potential repo rate range
- 5.75–6 per cent
- Forecast period
- FY27
- Potential bond-market effect
- Further pressure on government bond yields, particularly the benchmark 10-year G-Sec yield
Sources
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