RBI keeps rates unchanged, what next??

As expected interest rates remains unchanged, while the next thought that is ringing the markets is, Whether the down cycle is over? Is there a possibility of a rate hike?

At least not in the near future, while cuts may take some time as RBI will maintain status quo. Crude oil staying higher which is being caused by tensions in the Saudi kingdom will keep pressure on the inflation, which is mostly under control. Credit offtake is not picking up is another concern.

As the difference between short term and long term rates widens in the market, the yield is likely to go up on debt products.

So, good time to have some exposure in accrued debt or credit opportunities funds.

After a very good year for the equities, it is likely to have volatility and not give the same returns that it gave in the last 12 months. When equities get into challenge, debt outperforms. Adding more strength to the thought on exploring exposure into debt mutual funds.

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Ramesh Sigamani

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