With Inflation Up and RBI Policy Nearing, Should You Invest in Bonds Now?
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Inflation Surges, RBI Policy Looms: Is Now the Time to Lock Into Bonds?
M
Moneycontrol•18-03-2026, 07:01
Inflation Surges, RBI Policy Looms: Is Now the Time to Lock Into Bonds?
•WPI inflation is projected to hit 3.2% by March 2026, a 21-month high, driven by rising crude, natural gas, and edible oil prices due to the West Asia conflict.
•The upcoming RBI MPC meeting in April has bond investors keenly watching for signals on interest rates and liquidity, as inflation directly influences bond yields.
•Experts suggest a 'Laddering Strategy' for bond portfolios, spreading investments across different maturities to manage interest rate risks and reinvest at potentially higher rates.
•Locking into high-quality bonds yielding 6.7-7% can provide steady income and cushion portfolios against market volatility, especially if held to maturity.
•Bond prices and interest rates have an inverse relationship; buying long-duration bonds when rates are high allows investors to lock in yields and potentially gain from capital appreciation if rates fall.
