{
  "id": 4121606,
  "title": "RBI rate hike risk rises: Bandhan AMC’s Suyash Choudhary dials back duration in bond portfolios",
  "url": "https://urgent.news/2026/08/29/rbi-rate-hike-risk-rises-bandhan-amcs-suyash-choudhary-dials-back",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-29T05:54:45.000Z",
  "source": {
    "name": "The Economic Times - Top News",
    "slug": "the-economic-times-top-news",
    "url": "https://economictimes.indiatimes.com/markets/bonds/rbi-rate-hike-risk-rises-bandhan-amcs-suyash-choudhary-dials-back-duration-in-bond-portfolios/articleshow/133605170.cms"
  },
  "original_language": "en",
  "account": "The Reserve Bank of India's latest Monetary Policy Committee (MPC) minutes have heightened the risk of future rate hikes, prompting Bandhan Asset Management Company (AMC) to adjust its bond portfolio strategy. Suyash Choudhary, Chief Investment Officer (CIO) - Fixed Income at Bandhan AMC, explained that the market is now focusing more on when rate hikes might occur rather than if they will happen. This shift in focus represents a significant change from earlier expectations of a benign monetary policy stance.\n\nChoudhary noted that the MPC minutes emphasized the timing of potential rate hikes more decisively, which has made the quantum and timing of future hikes uncertain. While Bandhan AMC had previously anticipated a maximum of 50 basis points of rate hikes, this assessment has now become less certain. The fund house is now questioning whether the first rate hike could occur in October or if the 50 bps expectation might eventually be revised upward to 75 bps.\n\nThe change in expectations stems from the evolving policy narrative, with the RBI's focus on core inflation and the absence of inflationary signs losing their importance for the bond market. Additionally, the RBI's downward revision of its core inflation forecast has further pushed the market towards anticipating a tighter monetary policy stance. Meanwhile, Foreign Currency Non-Resident (FCNR) flows and associated bond demand have provided a temporary support for the market.\n\nBandhan AMC has been actively managing duration in its fixed-income portfolios throughout the year due to an uncertain global environment marked by commodity and global yield volatility, as well as a relatively bearish domestic backdrop. The \"Impossible Trinity\" theory has also complicated local financial conditions, limiting the transmission of RBI policy to market rates. Consequently, the fund house has been adding duration based on near-term changes in risk balance and expectations of potentially constructive medium-term factors.\n\nHowever, the current market environment has made the holding period of such positions more uncertain. Bandhan AMC's duration reduction across its funds primarily involves cutting exposure to long-duration government bonds. While relative valuations of long-duration government bonds still appear favorable, the fund house anticipates a flattening of the government bond curve over the next few months due to the tapering of FCNR-related bond buying and growing market positioning for RBI rate hikes.\n\nThis potential flattening of the curve could cause yields at the shorter end of the curve to rise faster than those at the long end as markets price in a higher likelihood of monetary tightening. Despite the relative attractiveness of the long end, Choudhary emphasized the importance of managing overall duration risk. Bandhan AMC reduced long-duration government bond positions on a standalone basis, taking advantage of market yields remaining within their trading range since late June.\n\nThis shift in strategy reflects Bandhan AMC's cautious stance, considering the evolving inflation, global yields, commodity prices, capital flows, and RBI policy expectations. The key message for debt investors is that the RBI rate cycle is no longer solely assessed through the lens of possible hikes, but the timing and magnitude of these hikes have become crucial factors influencing duration management for bond portfolios.",
  "summary": "Bandhan AMC has reduced duration across several bond funds as RBI rate hike risks rise following the latest MPC minutes. CIO Suyash Choudhary said markets are increasingly debating the timing and magnitude of potential hikes, while fading FCNR flows and changing policy expectations could drive a flatter bond yield curve.",
  "key_points": [
    "RBI's MPC minutes heighten risk of future rate hikes",
    "Bandhan AMC adjusts bond portfolio strategy, reducing duration",
    "First rate hike timing uncertain, could be October"
  ],
  "editors_take": "Bandhan AMC's shift to reducing duration in bond portfolios signals a more cautious stance, as the RBI's potential rate hikes and their timing have become crucial factors influencing bond market strategy.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}