Reaction over recent announcement on RBI on Repo Rate
Author(s): City Air NewsMr. Saravanakumar, CIO-Equity & Debt at LIC Nomura has shared views on the recent RBI rate cut: “RBI has reduced the Repo rate by 25 bps to 7.25 %. My expectation is that Banks should pass through sequence of rate...
cityairnews
Jun 2, 2015 12:30
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Mr. Saravanakumar, CIO-Equity & Debt at LIC Nomura has shared views on the recent RBI rate cut:
“RBI has reduced the Repo rate by 25 bps to 7.25 %. My expectation is that Banks should pass through sequence of rate cuts into lending rates. Today’s policy announcement is in line with our call of 25 bps cut in June and reinforces our view of a likely pause from here based on the current expectations. We maintain our call of a pause till at least end-CY2015 unless (1) monsoon surprises on the positive side, or (2) food prices continue to be muted with suitable government response even with weak monsoon. This is also predicated on crude prices remaining stable and external environment remaining benign.
It is expected another 25 bps rate reduction by RBI after today’s rate reduction. The 10 years Govt of India Securities will soften by another 20-25 bps going forward. Debt Fund investors mainly investors of Bond fund, Gilt fund should hold their investment. New investment should be made into Bond Fund, Income fund Plus, Gilt Fund.”
Date:
Tuesday, June 2, 2015
