After five rate cuts in a row, the Reserve Bank of India (RBI) has finally hit the pause button. The central bank, on Thursday, in its latest monetary policy review kept the repo and reverse repo rate unchanged. This is definitely good news for fixed deposit investors who have been seeing their interest rates fall throughout the year. Hopefully, RBI maintaining status quo on rates will prompt banks to hit pause on cutting FD rates further. The repo rate currently stands at 5.15 per cent and reverse repo rate at 4.90 per cent.In the last monetary policy review, the central bank cut the key policy rates by 25 basis points (100 basis points = 1 per cent). Since February, the repo rate has been cut by a total of 135 bps. In its monetary policy statement RBI stated, "After the introduction of the external benchmark system, most banks have linked their lending rates to the policy repo rate of the Reserve Bank. The median term deposit rate has declined by 47 bps during February-November … [Read more...] about RBI keeps repo rate unchanged: What does this mean for your loans and fixed deposits?
Fixed income vs equities
RBI vs Centre face-off: Amidst the ongoing tussle with the Central government, Reserve Bank of India (RBI) Governor Urjit Patel on Friday reportedly met Prime Minister Narendra Modi to resolve the unprecedented face-off over a range of issues including anonymity of the Central bank. According to a report by news agency PTI, Patel was in the national capital on Friday and have met the PM in a bid to work out a solution on contentious issues that have been the flashpoint between the central bank and the government during the last few weeks. Patel also met other senior officials of the Prime Minister’s Office (PMO). The meetings, which some said also included with the Prime Minister, came amid a face-off between the central bank and the finance ministry over issues ranging from the appropriate size of reserves that RBI must maintain to ease of lending norms to step up growth in an election year. Agency sources also stated that there are indications that the RBI may create a … [Read more...] about RBI vs Centre face-off: Governor Urjit Patel meets PM Narendra Modi to sort out differences
The only way that Indian equities can continue to rally from here is if emerging markets continue to do well, said Sanjay Mookim, India equity strategist at Bank of America Merrill Lynch. No further upside is likely even if a stable BJP-led government comes to power post elections as the market is already expecting that, said Mookim in an interview to Sanam Mirchandani. Edited excerpts: Has the market priced in the possibility of continuity of the current government post elections? It is debatable whether the elections’ outcome matters to the economy in the long-run and if there are reasons to be over-concerned about an inefficient government hurting the growth trajectory. One can argue that the impact of the central government has diminished over time because the total central government expenditure has fallen to 12% of the GDP from around 16%. What most investors would like to have is a stable government that has relative visibility for five years of being in power and that … [Read more...] about Indian equities can rally only if EMs continue to do well: Sanjay Mookim, BofAML
I am 26 years old. I have recently started SIPs of Rs 12,000 in three mutual fund schemes: Kotak Standard Multicap Fund, ICICI Prudential Bluechip Fund, and HDFC Mid-Cap Opportunities Fund. My investment horizon is 15 years. I want to create Rs 1 crore in 15 years. Should I continue to invest in these three funds? --Sachin SinghDilshad Billimoria, Founder, Dilzer Consultants, responds: To create Rs 1 crore in 15 years, you need to invest Rs 26,000 to Rs 27,000 every month. You have chosen good schemes. However, I do not know whether they match your risk profile. If you want to reduce the overall risk in the portfolio, you may add an Index fund. You can also make some fixed income investments to balance your mutual fund portfolio. … [Read more...] about Should I continue to invest in these mutual funds?
2019 would be a change in the sense that foreign inflows should also be quite strong both on the equity and fixed income side, Sunil Singhania, Founder, Abakkus Asset Manager, tells ET Now.Edited excerpts: Will it be a great 2019 for investors or is this going to be another challenging year? First of all, any equity investor has to be optimistic. If one is not optimistic, then one should not be an equity investor. Also, in a growing economy it makes sense to be optimistic. As far as challenges are concerned, we have seen many challenges over the last few years and these will continue. I think that is the essence of life. Notwithstanding the challenges and notwithstanding fact that 2018 was a very challenging year, we remain quite optimistic about 2019 and the years forward. But sometimes you have to be realistic. I mean in 2008, if you had become optimistic, then your optimism did not help. Now you are talking and comparing it to a very different year where it was euphoric. I do … [Read more...] about Value will take precedence over growth in next 1-2 years: Sunil Singhania, Abakkus Asset Manager