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Below is perspective on RBI MPC Policy by Mr. Nitin Shanbagh, Head – Investment Products, Motilal Oswal Private Wealth

“While the RBI policy was on expected lines, it remains to be seen as to when the stance changes based on pace of economic recovery. With system liquidity remaining extremely high, the 14 day VRRR quantum is being further hiked from the current Rs. 4 lakh crores to Rs. 6 lakh crores in stages by Dec’21. RBI is also open to introducing 28 day VRRR in a similar calibrated fashion, and has also discontinued the government bond buying program (GSAP). We maintain that a barbell approach to fixed income portfolio construction remains a prudent way to navigate interest rate volatility over the next few years. Core of the fixed income portfolio should be at the short to medium term (3-5 years), complemented with long term (10 years) roll down high credit quality strategies to provide an optimum balance of yield and duration.”

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