In this State of The Economy podcast, Nabodita Ganguly talks to Anurag Mittal,Anurag Mittal, Head - Fixed Income, UTI AMC, covering various aspects of the current economic landscape, with a particular focus on interest rates, the US dollar, and Indian bond yields.
Anurag Mittal begins by addressing the anticipation of interest rate cuts and the cautious approach of central banks, emphasising the need for a thorough evaluation of economic data before implementing any policy changes. He highlights the sequencing of events, indicating that a shift in policy language and liquidity management would precede any significant easing of monetary policy.
Mittal shares insights into the factors influencing the strength of the US dollar. He notes the importance of global economic conditions, particularly in the Eurozone and Japan, in determining the trajectory of the dollar.
Mittal provides a comprehensive analysis on the potential decline of the dollar’s dominance, suggesting that while there are talks, the dollar’s status remains robust due to limited alternatives for transparent and convertible currencies.
The discussion transitions to Indian bond yields, with Mittal pointing out the attractiveness of Indian bonds, especially with the expected policy easing and inclusion in the J.P. Morgan Global Emerging Bond Index. He explains the potential for a rally in bonds from a tactical perspective but cautions that the long-term trend depends on the level of disinflation.
The conversation concludes with Mittal sharing insights into the inflation scenario in India, discussing the challenges posed by food prices and the expectations for a shallow rate-cut cycle. He provides valuable insights for foreign investors, recommending moderate-duration funds for those with a longer investment horizon and suggesting short-term options for those with a shorter horizon.
Hosts: Nabodita Ganguly,Producer: Lokeshwarri SK.
