Investors should allocate bulk of portfolio to shorter-duration debt funds

Shift part of portfolio to longer-duration funds when inflation moves sustainably close to RBI's target level

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) chose to keep the repo rate unaltered at 6.5 per cent on June 8, 2023. This decision, accompanied by an unchanged stance, emphasises the RBI’s commitment to reining in inflation. Consumer inflation is expected to average 5.1 per cent in 2023-24 financial year (FY24), higher than the target rate of 4 per cent.

Is a rate cut imminent?

Benign commodity prices and a good monsoon leading to high food production could ease inflation. Conversely, negative developments on these fronts could cause prices to surge. Clarity on further rate