Archive · 6 Aug 2026
RBI Keeps Repo Rate Steady; Experts Favour Quality Debt Investments
The Reserve Bank of India is the bank that looks after money for the whole country.
It decided not to change an important number called the repo rate.
That number helps decide how much it costs banks to borrow money.
Keeping it steady means the central bank thinks India's economy is doing okay.
But it is still watching the prices of things like food and fuel.
Two big investment companies gave advice to people who lend money to companies.
Edelweiss says to pick very safe bonds that pay back in two to three years.
Axis says bonds that pay back in three to five years are a better choice.
Both agree that investors should stick with high-quality, safe investments.
They also warn that rising oil prices could cause problems later.
The RBI kept the repo rate unchanged, citing confidence in the domestic economy's resilience while staying watchful of inflation and external uncertainties.
Edelweiss Mutual Fund called the decision a 'dovish hold' and recommended AAA-rated bonds maturing in 2-3 years, along with bond funds with weighted average maturity up to three years.
Axis Mutual Fund has an overweight stance on 3-5 year corporate bonds and select State Development Loans (SDLs), while staying neutral on government securities.
Both fund houses converge on prioritising high-quality fixed-income assets over aggressive duration bets.
Axis expects the 10-year government bond yield to trade in the 6.75%-7.10% range in the second half of 2026, with crude oil flagged as the most important external variable.
- Who
- The Reserve Bank of India (RBI), with fund houses Edelweiss Mutual Fund and Axis Mutual Fund advising debt investors.
- What
- The RBI kept the repo rate steady, and experts recommended where debt investors should put their money.
- When
- Not specified in the article; Axis's yield forecast covers the second half of 2026.
- Where
- India
- Why
- The pause reflects confidence in economic resilience with contained core inflation, while external uncertainties such as crude oil prices, geopolitical developments and elevated global bond yields remain risks.
Edelweiss: 2-3 Year Accrual Strategy
Axis: 3-5 Year Corporate Bonds
Preferred bond maturity
Edelweiss: 2-3 Year Accrual Strategy
Edelweiss favours AAA-rated bonds maturing in 2-3 years, plus actively managed bond funds with weighted average maturity up to three years.
Axis: 3-5 Year Corporate Bonds
Axis prefers an overweight stance on 3-5 year corporate bonds and select State Development Loans (SDLs).
Government securities stance
Edelweiss: 2-3 Year Accrual Strategy
Edelweiss recommends actively managed bond funds with weighted average maturity of up to three years as part of its accrual approach.
Axis: 3-5 Year Corporate Bonds
Axis is neutral on government securities and cautious on long-duration SDLs due to elevated state borrowing, supply pressures and limited scope for yield compression.
Bond curve attractiveness
Edelweiss: 2-3 Year Accrual Strategy
Edelweiss sees the 2-3 year part of the curve as offering an attractive balance between yield and interest-rate risk.
Axis: 3-5 Year Corporate Bonds
Axis sees the 3-5 year segment as offering favourable carry, ample liquidity and an attractive risk-reward balance.
- Policy action
- Repo rate kept steady
- Edelweiss stance
- "Dovish hold"; favours high-quality accrual strategies
- Edelweiss picks
- AAA-rated bonds in the 2-3 year segment; bond funds with weighted average maturity up to three years
- Axis picks
- Overweight 3-5 year corporate bonds and select SDLs; neutral on government securities
- 10-year bond yield forecast (H2 2026)
- 6.75%-7.10% (Axis)
- Key external risks
- Crude oil prices, geopolitical developments, El Niño-related food risks, elevated global bond yields, currency volatility
- Core inflation
- Contained despite higher food and fuel prices
- Common advice
- Prioritise high-quality fixed-income assets over aggressive duration bets