RBI Policy quote : Mahendra Jajoo, CIO, fixed income at Mirae Asset Investment Managers (India) Pvt Ltd

” RBI hiked repo rate by 25 bps to 6.5%, as was the market consensus. While there is marginal reduction in near term inflation projection, FY24 inflation estimate still remains well above 5%. Thus, the guidance continues to be one of continued vigil and caution. A marginal upgrade in growth forecast bodes well on economy front. While the uncertainties remain, incoming data suggests further moderation in inflation in coming months. As such, Market expects policy rates to be on pause from next policy onwards. While the 10Y govt bond yields ticked up by 3-4 bls as an immediate reaction, they are expected to largely remain range bound in current band of 7.20-7.40 for the time being. Short term rates are likely to move higher in line with adjustment in policy rates.”