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.