New Delhi, Oct. 4 -- The Reserve Bank of India (RBI) is expected to raise the repo rate by 25 basis points in October, with further hikes likely in FY27 as inflation risks persist, potentially pushing the benchmark rate to 5.75-6 per cent, pressuring G-sec yields, as per a report by Union Bank of India.

The lender noted in its report that Indian government bonds remained under pressure in September as high crude oil prices and rising global yields strengthened expectations of RBI rate hikes. At the same time, higher domestic bond supply, including RBI open market operation (OMO) sales and increased long-tenor issuance in the second-half borrowing calendar, added to the pressure and kept yields elevated despite lower overall government bo...