RBI Monetary policy reaction: LIC Mutual Fund Asset Management

10 Feb 2022 , 04:37 PM

The actionable for retail investors from the RBI’s policy is one, they should remain cautious due to huge borrowing starting April 2022, even as global yields and commodity prices remain elevated.

Secondly, they should avoid locking in long term debt investment at current yields. This translates into retail debt investors taking exposure in debt schemes with duration of 1 to 3 years three years depending on individual risk appetite.

Highlights:

o No change in rates.

o Governor mentioned that inflation is temporary. Will decline in medium term.

o Since there is less borrowing till March 22, market should remain range bound.

o Global bond yields and oil will give direction to the market in the short to medium term.

The author of this article is Marzban Irani, CIO — Fixed Income, LIC Mutual Fund Asset Management

The views and opinions expressed are not of IIFL Capital Services, indiainfoline.com