Show Hide
Internet Banking Login
Log on to Internet Banking

 

Contact
Find a Branch
    Private Banking Network
     
  • Bank 24/7 through a widespread network of our exclusive ICICI Bank branches for Private Banking and Wealth Management customers.
  •  

     

Show Hide
Internet Banking Login
Log on to Internet Banking

 

Contact
Find a Branch
Private Banking Network
 
    • Bank 24/7 through a widespread network of our exclusive ICICI Bank branches for Private Banking and Wealth Management customers.

 

 

RBI Policy and Fixed Income Outlook - February 2019

The Monetary Policy committee announced its Fifth Bi-monthly Monetary Policy for the financial year 2018-19.

 

Key Points:

  • RBI’s monetary policy committee reduced the policy repo rate under the Liquidity Adjustment Facility by 25 bps, from 6.50 to 6.25.
  • Stance was changed from ‘calibrated tightening’ to ‘neutral’, on expected lines.
  • 4 out of 6 members voted in favor of the rate cut decision.
  • CPI forecast has been revised downwards to 2.8% in Q4 FY19, 3.2-3.4% in 1H FY20 and 3.9% in Q3 FY20 – below the 4% target.
  • GDP growth for FY20 is projected at 7.4% (7.2-7.4% in 1H FY20 and 7.5% in Q3 FY20), with risks evenly balanced.
  • Significant changes were made in the FPI investment limits in the corporate debt market and lending norms for NBFCs.
  • Mr Das said in the press conference that the neutral stance “provides flexibility”. This suggests that, unless inflation suddenly surges, further cuts would follow.
  • In US, difference between two and 10-year Treasury yields narrowed to 14 basis points (1/100 of a percent). In fact, yields on 1 year is higher than 5 year yield. When longer tenure yields may fall below the shorter tenure, called as yield curve inversion, which is normally seen to be a sign of impending recession.
  • We have seen a good widening of spreads between Government bonds and corporate bonds. The corporate bond yields have not eased in the same quantum as government bond yields. Hence we prefer Short term & corporate bond funds (AAA & AA) with tenure of 2-5 years.