Yields unlikely to drop sharply; favour short-to-medium bonds: Avnish Jain

25-bps rate cut by December looks likely, but RBI's neutral stance and global uncertainties mean yields may not fall sharply, says Jain

The Reserve Bank of India (RBI) has indicated the possibility of further easing in interest rates, but its ‘neutral’ stance suggests any additional cuts are likely to be limited, said Avnish Jain, head of fixed income, Canara Robeco Asset Management Company, in an email interaction with Abhishek Kumar. Edited excerpts: 

How do you read the bond market’s response to the latest RBI policy, and do you see scope for further rate cuts in the coming months? 

Bond markets were upbeat about the monetary policy’s dovish tilt. The RBI’s Monetary Policy Committee (MPC) acknowledged a sharper-than-expected decline in overall Consumer Price