The Reserve Bank of India (RBI) in the last week changed its stance, prioritising inflation over growth. Despite the RBI’s pivot, there is no clarity on when the first rate hike will come. As a result, investors in debt schemes of mutual funds are likely to avoid long-duration bond funds in the near term. Short-term debt funds, typically with a duration of up to three months, are likely to witness higher inflows as short-term rates have started moving up.
