Important StoriesMukesh Ambani hosts Marco Rubio at Reliance’s Jamnagar refineryComcast plans significant job cuts ahead of NBCUniversal spin-offCore sector grew at 7.9% in September; industrial outlook remains uncertainSugar-ethanol curbs put auto industry’s E20 transition to test; OMCs face ₹813-crore potential cost increaseCommerce Department steps up FTA outreach amid low utilisationFollow UsFOLLOW US ON WHATSAPPHomeGO BACK TO HOME THIS AD SUPPORTS OUR JOURNALISM. SUBSCRIBE FOR MINIMAL ADS. THIS AD SUPPORTS OUR JOURNALISM. SUBSCRIBE FOR MINIMAL ADS. Govt bond selloff to continue as RBI policy minutes hint at more rate hikes Benchmark ⁠6.94% 2036 bond yield may trade between 7.40% and 7.47%, trader at a primary dealership says By Reuters Updated - October 22, 2026 at 07:52 AM. | Mumbai, October 22 ×ShareWhatsAppXFacebookLinkedInMessengerRedditMailhttps://www.thehindubusinessline.com/markets/govt-bond-selloff-to-continue-as-rbi-policy-minutes-hint-at-more-rate-hikes/article71609906.eceCopy India’s overnight ⁠indexed swap (OIS) rates are expected to trend higher, in line with bond yields and oil prices.

Indian government bonds are likely to weaken further in early deals on Thursday, ​after minutes of the latest monetary policy meeting showed that members ‌of the rate-setting panel indicated further rate hikes may ​be needed to curb inflation.

The benchmark ⁠6.94 per cent 2036 bond yield may trade between 7.40 per cent and 7.47 per cent, according to a trader at a primary dealership, after closing at 7.4427 per cent ‌in the previous session.

The Reserve Bank of India’s Monetary Policy Committee had raised the repo rate ‌by 25 basis points to 5.50 per cent earlier ‌this month, ⁠its first hike in nearly four years. ⁠It also shifted its stance to “calibrated tightening” from “neutral”, hinting at more hikes to come.

A sharp rise in oil prices due to war in the ​Middle East and a deficient ‌monsoon rain season have sparked a jump in food prices, stoking inflation worries and prompting markets to price in a little over 100 bps of hikes in ‌the next 12 months.

With oil continuing to ​exhibit an upside bias and more signs of generalisation of inflation pressures seen in the September inflation ⁠print, the RBI may continue tightening, analysts at Yes Bank said in a note.

“Our base case remains for ‌an incremental 50 bps increase in policy rates – 25 bps each for December and February.”

Meanwhile, the benchmark Brent crude contract stayed above $110 per barrel, as more attacks by the Houthis on Saudi Arabia prompted the United States to order some diplomats and family members to leave ‌its missions in the Kingdom.

India is particularly vulnerable to elevated ​energy prices as it imports nearly 90 per cent of its requirement. Consistently elevated prices risk feeding into the ⁠nation’s inflation trajectory, impacting the rupee and government finances.

India’s overnight ⁠indexed swap (OIS) rates are expected to trend higher, in line with bond yields and oil prices.

The ‌1-year OIS ended 6 bps higher at 6.59 per cent, while the 2-year rate rose 5 bps to 6.66 per cent and ​the 5-year rate settled at 6.84 per cent on Wednesday.

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.

Terms & conditions | Institutional Subscriber