Quote on Post Monetary Policy Committee Vikas Garg, Head – Fixed Income, Invesco Mutual Fund
Below the Quote on Post Monetary Policy Committee Vikas Garg, Head – Fixed Income, Invesco Mutual Fund
“A Hawkish Pause! The MPC has held the policy rate at 5.5% after cutting it by a cumulative 100 bps over the previous three meetings, while maintaining a neutral stance. The FY26 headline inflation projection has been moderated by 60 bps to 3.1% on the back of benign food prices; however, 1QFY27 inflation is projected at 4.9% due to an unfavourable base effect. Growth projections remain healthy at 6.5% for FY26, despite global tariff-related uncertainties. Forward-looking growth-inflation dynamics set a high bar for any future rate cuts. A small window for a possible final rate cut may open in the October or December policy meetings, but only if economic growth surprises meaningfully on the downside. Comforting commentary on adequate banking liquidity provides some relief. Currently elevated market yields, combined with low running inflation, offer a favourable risk-reward profile for investors”
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