In this State of the Economy podcast, Parvatha Vardhini, Editor, bl.portfolio talks to Rajeev Radhakrishnan, Chief Investment Officer, Fixed Income at SBI Mutual Fund to understand the various nuances of the debt market.

Radhakrishnan reflects on the challenges and opportunities presented by the current market conditions. Radhakrishnan talks about the complexities of global market dynamics, giving insights on the volatility and expectations on the Fed rate that have defined the last few months.

Shifting the focus to India, the discussion explores expectations around the repo rate for the year. Radhakrishnan provides a comprehensive overview and dispels notions of the RBI mimicking the Fed’s approach and emphasises that India’s central bank is more likely to maintain a pause, considering the country’s specific growth and inflation dynamics.

As the podcast unfolds, Rajeev discusses the impact of JP Morgan index inclusion, citing ongoing flows and potential positive factors influencing demand for bonds. This has kept yields range- bound, he reasons.

Investors seeking practical guidance will find Radhakrishnan’s insights valuable. Radhakrishnan addresses crucial questions for investors — whether to focus on duration or accrual. In the near term, Rajeev recommends exploring high-grade, shorter-term bonds for investors with a lower risk appetite. This advice aligns with his expectation of an extended pause in Indian monetary policy, coupled with a potential shift in liquidity stance later in the year. Rajeev points to the attractive spreads of AAA PSU / PFI bonds over government securities as an opportunity for investors to capitalise on.

(Host: Parvatha Vardhini, Producer: Siddharth MC)

About the State of the Economy Podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.