The Reserve Bank of India (RBI) halted its rate hike cycle in its April monetary policy review, prompting investors to anticipate a downward turn in interest rates. According to data on interest-rate swaps, it appears that interest rates may begin to decline in the early part of next year. The International Monetary Fund (IMF) has also weighed in, stating that the recent surge in real interest rates is likely to be transitory.
 
“The effect of interest rate hikes will manifest in demand moderation, leading to lower inflation expectations. Inflation readings will come down gradually, validating the RBI's decision to maintain status quo on repo rate. In the coming months, bond market yields are likely to be range-bound with a downward bias,” says Sandeep Bagla, chief executive officer (CEO), TRUST Mutual Fund.
 
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Fixed-income investors with the requisite risk appetite are looking forwa