Arvind Chari, fund manager, Quantum Mutual Fund advises investors looking for investment options to consider debt instruments like fixed deposits (FDs) and fixed maturity plans (FMPs). He expects interest rates on FDs and market instruments for 1-3 year to remain stable at over 9%.
"We believe that given that the deposit growth rate is weak, banks would be unable to cut deposit rates despite any eventual repo rate cuts," he said in an interview to moneycontrol.com.
Further, he doesnt see the central bank slashing interest rates in the upcoming monetary policy. "We believe that rate cuts are possible only on some rupee appreciation; sharp fall in oil prices and drop in food prices or a combination of these three in different measures," he added.
Meanwhile, Chari is optimistic that the government will be able to accomplish the fiscal deficit target. "Given that this years numbers were made with tax increases and not expenditure cuts,