Quote on RBI MPC Expectation by Mr. Saurav Ghosh, co-founder of Jiraaf
Below the Quote on RBI MPC Expectation by Mr. Saurav Ghosh, co-founder of Jiraaf
“The combination of rising global bond yields, elevated energy prices, and increasing food-price pressures following a weaker monsoon has materially strengthened the case for a rate hike in the October policy review. At this stage, a 25 bps hike appears to be largely priced in, while markets are increasingly factoring in cumulative tightening of at least 50 bps by December.
The more important signal, therefore, may come from the RBI’s commentary rather than the October rate action itself. The central bank’s assessment of inflation persistence, particularly the pass-through from energy and food prices, will shape expectations for the next leg of the cycle. If these pressures remain elevated into early 2027, the possibility of an additional 25 bps hike next year could come into consideration.
For bond investors, the more prudent approach would be to stagger investments across tenures and credit ratings, allowing portfolios to benefit from yield movements while avoiding concentration at a single point in the rate cycle.”
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