The Reserve Bank of India's decision to keep policy rates unchanged means status quo for your debt mutual fund investments. Once the news has sunk in, the market is likely to wait the next policy for firm cues on interest rate cuts. "This might create a sell-off situation. The market will look for the next policy," says R Sivakumar, head - fixed income, Axis Mutual Fund.
Most money market participants were hoping for a 25-basis-points cut as the system was awash with liquidity after the demonetisation drive. However, they were cautious in their optimism because of uncertainties on US Fed rate and commodity front.