‘Take advantage of rate volatility’
Short-term rates have already moved up by about 250-300 basis points. Do you see any further rise?
The money market rates are more of liquidity-driven rather than the benchmark rates (repo/reverse repo). Liquidity in the system has been negative to the tune of around -2 per cent over the last 6 months, which has pushed the money market rates up by 250-300 basis points. April and May have been historically better months in terms of liquidity. Therefore, we believe, in the coming months the money market rates stabilise and very short rates (1-2 month) may come down.
What kind of increase do you see on coupons of corporate paper? Can investors expect higher returns from fixed income paper?
The corporate bond market is still thinly traded in India. The papers move more on the G-Sec movement rather than any other factor. Another deciding factor for the movement of yield will be the response of FIIs
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