Commenting on the Mid Quarter Review of Monetary Policy, Shobit Gupta, Head Fixed Income, Principal Mutual Fund said, “Along expected lines, RBI raised Repo and Reverse Repo rates by 25 basis in continuation with its anti-inflationary stance while further reiterating concern on persistent high domestic inflation. RBI acknowledged some slowdown in certain sectors but sees no evidence of any sharp or broad based slowdown alleviating some concerns on the growth front.
On the backdrop of recent economic numbers and moderation in commodity prices, we would expect RBI to tone down stance on the growth front but with the pass through of fuel prices and fiscal pressures, it is expected to continue hiking rates by another 50 basis in the remaining FY 12. Government Bond yields are expected to remain volatile on external factors coupled with domestic economic data and supply concerns while money market conditions are expected to remain stable on balanced liquidity conditions.”
Source: http://www.adityabirlamoney.com/news/485479/10/22,24/Mutual-Funds-Reports/G-sec-Bond-yields-are-expected-to-remain-volatile-on-external-factors-coupled-with-domestic-economic-data-and-supply-concerns
