Author: Larissa Fernand

Bangalore: In an uncertain interest rate environment, a faltering monsoon, a beaten-down India growth story and global uncertainty, short-term income funds make for a viable option. Invest in them for at least 12 months.

Mirror, Mirror on the wall

Will interest rates rise or will they fall?

Would it not be fabulous if we could gaze into a crystal ball and decipher what the central bank's next move would be? Unfortunately, or probably fortunately, such wishful thinking comes alive only in fairy tales. In reality, ambiguity is more the norm than the exception.

Ahead of the RBI's quarterly monetary statement on July 31, 2012, uncertainty rules as the debate continues on whether the Reserve Bank of India will cut rates or maintain a status quo.

In the June 18, 2012, mid-quarter monetary policy review, the RBI kept key policy rates unchanged, much to the dismay of market players who were expecting a rate cut. But given the stubbornly high inflation figures, the central bank could not afford the luxury of a cut.