RBI may begin rate hikes as rate-cut cycle ends
Headline by Prism · from 1 report
Puneet Pal of PGIM India Mutual Fund expects the Reserve Bank of India to transition from rate cuts to a rate-hiking cycle due to inflationary pressures.
The brief
Written by software from the 1 report below.
- The Reserve Bank of India is expected to implement rate hikes totaling 50-75 basis points by the end of fiscal year 2027.
- Rising inflation, higher global bond yields, and increasing crude oil prices are driving this shift in monetary policy.
- Investors are advised to consider a phased approach to fixed-income investments such as target-maturity and high-quality corporate bond funds.
- Market experts view current conditions as creating new opportunities despite the volatility.
What to watch next
- RBI October monetary policy meeting
- Domestic CPI inflation projections
- Crude oil price trends
The points restate the reports; where one says why it matters, that is Prism's reading, not a reported fact.
Who said what
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Puneet Pal
Head of Fixed Income at PGIM India Mutual Fund
2 quotes · 1 outlet
“We expect a 50-75 bps hike in policy rates by the end of FY27.”
In the article
…and with the current surge in crude prices, it’s very likely that CPI inflation projections will be revised higher, which , in our view, means that MPC will need to start hiking rates from October Policy onwards. We expect a 50-75 bps hike in policy rates by the end of FY27. The best time to invest in Fixed Income is when rate s and yields are rising and we think that the rise in yields will present a good investment opportunity for investors over the next six months.Q) The RBI has already…
“The rate cutting cycle is over and we are at the cusp of a rate hiking cycle and as such we do not foresee any meaningful downside in yields from here.”
In the article
…six months.Q) The RBI has already delivered significant rate cuts, while inflation is moving higher. Do you think the easy part of the Indian bond rally is behind us, or can bond yields still move lower from here?A) The rate cutting cycle is over and we are at the cusp of a rate hiking cycle and as such we do not foresee any meaningful downside in yields from here. Indian bond yields have been rising since last year and the current deluge of liquidity on back of the FCNR flows can, at best, provide temporary relief to the bond markets. As the rate hiking cycle in India starts, we…
Coverage
1 outlet
All filed from India
NamedIndia · United States · PGIM India Mutual Fund · Puneet Pal · US Federal Reserve
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