New Delhi, Oct. 8 -- The Reserve Bank of India's 25-basis-point (bps) repo rate hike has raised questions among debt fund investors about how further rate moves could affect bond yields and fund returns.

On October 7, the RBI's Monetary Policy Committee (MPC) raised the policy repo rate by 25 bps to 5.50% from 5.25%. A higher repo rate typically pushes bond yields up and existing bond prices down, which can affect debt fund NAVs and returns.

As per the Kotak Mutual Fund October 2026 report, it now expects another 50 bps of rate hikes by March 2027, taking the repo rate to 6%, citing the RBI's shift from neutral to a calibrated tightening stance and its higher FY27 CPI inflation projection of 5.2% from 5%.

Here's what debt-fund investor...