Hi, Below is the quote by Ms. Bekxy Kuriakose, Head – Fixed Income, Principal Mutual Fund on the First Bi – monthly Monetary Policy:
Hi,
Below is the quote by Ms.
Bekxy Kuriakose, Head – Fixed Income, Principal Mutual Fund on the First Bi – monthly Monetary Policy:
“As was widely expected by market, RBI kept key
rates on hold and maintained their neutral stance with a vote of 5-1 in favour
of the decision.
The lowering of
inflation forecast for H1 2018-19 (4.7 to 5.1% range) and H2 (4.4%) is positive
for the markets and should aid in rally in gilt and bond prices. However it is
pertinent to note that while RBI has lowered their inflation forecasts, they
still continue to sound a lot of caution of various fronts which pose upside
risks to inflation- crude oil prices, fiscal deficit slippage risks, staggered
impact of HRA increases, reversal in food prices, likely increases in MSP, and
slippage in States fiscal deficit as well. Also its important to note that
RBI’s household survey as well as Industrial outlook survey show that firms and
households expect prices to move up.
Given the ample banking
system liquidity and recent measures by govt and RBI on G sec borrowing
program, bond prices should remain supported. We expect money market rates to
remain benign.”
Attached is a
photograph of Ms. Bekxy Kuriakose for your reference.
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