Tips on managing fixed income as rate cycle turns4 min read . Updated: 10 Feb 2022, 01:52 AM IST
Investment in debt funds can maintain some liquidity and diversify portfolio beyond equities
What if the Reserve Bank of India (RBI) raises interest rates? If 10-year government security (g-sec) yield is anything to go by, the rising interest rate regime is not far.The 10-year benchmark bond issued by the central government touched a peak of 6.95% on 4 February after the government announced its higher than expected borrowing programme for the financial year 2022-23 on the Budget 2022 day. The yield has moderated slightly to 6.79 per cent as on 9 February after the RBI called off a scheduled bond auction of ₹24,000 crore this week, but the bond market very much expects it to hit 7% over the next couple of months. Why should you be concerned about the g-sec yield?