Aditya Birla Sun Life Mutual Fund

Key Highlights of the Second Bi-monthly Monetary Policy Statement, 2019-20

Jun 11, 2019
5 mins | Views 5441
  • Repo Rate – reduced by 25 bps to 5.75%

  • Reverse Repo Rate – reduced by 25 bps at 5.50%

  • Bank Rate & Marginal Standing Facility (MSF) Rate – reduced by 25 bps at 6.00%

  • Cash Reserve Ratio – The CRR of scheduled banks remains unchanged at 4.0% of their net demand and time liabilities (NDTL).

  • Monetary Policy stance changed to ‘|accommodative.’

These decisions are largely focused on enhancing systemic liquidity to support growth.

RBI Forecast was broadly unchanged with 1HFY20 Consumer Price Index (CPI) inflation at 3.0-3.1% and 2HFY20 inflation at 3.4-3.7%.

FY2020 GDP growth forecast was reduced by 20bps to 7.0%, with 6.4-6.7% growth in 1HFY20 and 7.2- 7.5% in 2HFY20, with risks evenly balanced.

Outlook

Investor with short term horizon may look into Ultra short term space where we continue to be constructive in Money Markets, Ultra short term & Low duration funds over liquid funds.

Investor with longer horizon may consider Aditya Birla Sun Life Corporate Bond Fund and Aditya Birla Sun Life Banking & PSU Debt Fund in the Short Term space.

Source: Second Bi-monthly Monetary Policy Statement, 2019-20, Reserve Bank of India

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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