The Reserve Bank of India (RBI) on Wednesday cut repo rate by 35 basis points (bps) to 5.40 percent and maintained its stance as accommodative. Amandeep Chopra, group president & head of fixed income at UTI Mutual Funds (MF), shared his views on the policy.

Share Market Live

NSE

“35 bps rate cut was quite a big move for RBI. However, to a large extent, the reaction was muted. The markets were fairly heavily positioned pre-policy and that did end up in a bit of trimming off positions across the board. So to some extent, the typical reaction one would have expected in 10-year yield did not materialise,” he said.

“Till the next policy meet, the 10-year will find it a bit difficult to breach 6.25 percent unless you start seeing either a much more dovish commentary from the US Fed and the rest of the global central banks. However, we continue to be quite constructive in terms of the direction of future rates,” he added.

“We are still pencilling in between 25 bps and 40 bps further cuts from here. With another rate cut going ahead, you could see the 10-year come closer to 6 percent levels,” said Chopra.

“You could see the 10-year in a band of 5.75-6.25 percent going ahead,” Chopra said.

First Published:Aug 8, 2019 10:33 AM IST