Investors need to fine tune investment strategy to tackle rising rates

On the investment side, stay predominantly in short-term debt funds, but begin taking some duration exposure as the benchmark yield climbs further

The benchmark 10-year government bond yield, which was in the 8 per cent plus zone on December 1, 2014, entered it again on September 4, 2018. It has hardened by 150 basis points (bps) over the past year. According to economists, this high interest-rate environment may persist for the next 18-24 months. Investors need to fine tune both their borrowing and investment strategies to cope with this situation.   

Driven by currency weakness and oil: The latest round of hardening of government securities (G-sec) yield was driven by the rupee's depreciation. When the rupee falls, it leads to imported inflation, forcing