Stick largely to accrual funds despite softening of 10-yr govt bond yield

Moving into duration-oriented funds could be risky; as for dynamic bond funds, stay invested if you have already done so

As was widely expected, the Monetary Policy Committee decided to keep interest rates unchanged. But, the lowering of the inflation estimate for 2018-19 did surprise many. The benchmark 10-year government bond yield, which had risen to 7.78 per cent in the recent past, had softened to around 7.3 per cent after the government announced that it would borrow less in the first half of the financial year. After the monetary policy, it fell further to 7.13 per cent, following the Reserve Bank of India’s (RBI’s) dovish outlook on inflation. 

Economists expect an extended pause. “With inflation estimated to be in no