IGI Logo

Below are Views on RBI Monetary Policy by Vivek Goel, Co-founder and Joint Managing Director, Tailwind Financial Services Limited

Following up on its August policy, the Monetary Policy Committee (MPC) continued the rate hike cycle with another 50 bps hike to take the repo rate up to 5.9%. Broadly, the policy was in line with expectations given the backdrop of Fed rate hike and currency volatility.

The governor reaffirmed resilience being seen on the domestic front amidst a turbulent global backdrop due to inflationary pressures and aggressive policy tightening. This, along with over optimism in India's ability to steer through the crisis , looks to have reassured the markets with major indices rising sharply post the policy.

For investors holding debt mutual funds or bonds broadly the hike had been priced in and mark to market impact should be limited. Investors in liquid and money markets will further benefit from higher accruals as yields have now moved up to above 6%. We are also seeing a slew of NFOs for target maturity funds as 5-10 year yields are now upwards of 7% and provide a good opportunity for investors to lock-in returns at these levels.

Above views are of the author and not of the website kindly read disclaimer