“Fixed income markets should witness further strengthening of ongoing momentum and bond yields are expected to ease further in coming months”
Anurag Mittal, Head of Fixed Income at UTI AMC:
FinTech BizNews Service
Mumbai, February 7, 2025: Sanjay Malhotra, Governor, Reserve Bank of India, announced the decisions of the MPC on Friday. AMC players have positively responded to the measures announced by the RBI Governor:
Anurag Mittal, Head of Fixed Income at UTI AMC:
“Today's policy was well balanced and was largely a continuation of the stance change in Oct and CRR cut in December. The MPC still retained its neutral stance and did not over commit on liquidity. The RBI also continues to remain comfortable on the domestic growth outlook. This indicates a shallow rate cut cycle ahead. Hence, we continue to prefer short to medium duration products given the favourable risk reward.”
Mahendra Kumar Jajoo, CIO Fixed Income at Mirae Asset Investment Managers (India):
In line with the market consensus, MPC reduced key policy repo rate by 25 bps. Keeping in mind the prevalent volatile geopolitical situation, stance has been retained as neutral. Guidance seems to be of further rate cuts in coming quarters. While GDP growth forecast is at 6.7% for FY26, up marginally from 6.6% at the last meeting, inflation projections are revised downward to 4.5% vs 4.8% in previous review. Further there is strong guidance for providing adequate liquidity including injecting durable liquidity which typically indicates more open market purchase operations of dated securities. Thus, policy is a positive response to meaningful fiscal consolidation and guide path in the union budget and seems to set the tone for a deeper easing cycle and possibly more rate cuts to follow. Fixed income markets should witness further strengthening of ongoing momentum and bond yields are expected to ease further in coming months.”
Kaustubh Gupta, Co-Head of Fixed Income, Aditya Birla Sun Life AMC:
"RBI cut repo rate by 25bps after keeping it unchanged for two years, while keeping the stance "unchanged". Today's policy reflects a balanced approach of focusing towards supporting economic growth, managing inflation and protecting financial stability. Rate cut amidst global uncertainty and depreciating pressure on INR, suggest RBI prioritising growth as inflation is aligning towards their target."
