The Reserve Bank of India (RBI) at its first policy outcome for the financial year 2021-22 struck a dovish tone, much along expected lines, as the monetary policy committee unanimously voted to keep the key repo rate unchanged at 4 per cent and vowed to hold 'accommodative' stance.
But what really became the centerpiece of the policy outcome was the announcement of the secondary market G-sec acquisition programme which the bond market needed the most. The move was well-received by the money market as the yield on the 10-year government bond fell by nearly 6 basis points to 6.078%. While the central bank kept the growth projections unchanged at 10.5% for FY22, it flagged off Covid as a key risk to the outlook. Amid this backdrop, what should investors do now?
Lakshmi Iyer, CIO-Debt and Head Product at Kotak Mahindra AMC and Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services talks about how equity investors should place themselves in this market, if the cool off in bond yields would sustain and what should be the fixed income investment strategy?
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