We believe, as the RBI gains comfort with growth picking-up, the first nudge would be to move the short-term rates closer to the mid-point of the policy rate corridor.

1. Impact
Analysis
Monetary Policy Statement, 2021-22
 Economic activity picked up pace in June-July as some states eased pandemic containment measures
 Industrial production expanded in double digits year-on-year (y-o-y) in May 2021 on top of the massive
jump in April 2021 level
 High-frequency indicators posted strong growth in June and July 2021
 System liquidity remained ample. As on July 16, 2021, money supply (M3) and bank credit by commercial
banks grew by 10.8 per cent and 6.5 per cent, respectively.
 Up to June 30, 2021, India’s foreign exchange reserves increased by US$ 43.1 billion to US$ 620.1 billion in
2021-22
1
RBI POLICY HIGHLIGHTS INFLATION HIGHLIGHTS
DOMESTIC ECONOMY
WHAT IS RBI’S STANCE? ACCOMMODATIVE
• CPI (Consumer Price Index) inflation,for the month
of June came in at 6.3%
• Food inflation increased to 5.6% in June from 5.2%
in May
• Housing inflation, which primarily includes rental
charges came in at 3.7% for the month of June
• RBI kept the Repo rate unchanged at 4.00%
• Reverse Repo rate remains unchanged at 3.35%
• Marginal Standing Facility (MSF) rate and the Bank
rate accordingly remains unchanged at 4.25%
• Cash Reserve Ratio (CRR) isat 4%
• Statutory Liquidity Ratio (SLR) at18.00%
Data Source: RBI Monetary Policy Statement 2021-22 dated August 06, 2021, Data Source for CRR & SLR: RBI
RBI’s
Inflation
Target
2.5
3.5
4.5
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
RBI Policy Rates Trend- Last 1 year
Repo Rate CRR Reverse Repo
0
2
4
6
8
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
CPI Inflation (Month-on-Month %)

2. GLOBALECONOMY
 Since the MPC’s meeting in June, the global economic recovery has moderated due to the delta variant of the virus.
However, countries that are ahead in vaccination and have been able to provide policy stimulus are rebounding strongly.
 Headline inflation has ratcheted up in several advanced economies (AEs) and emerging market economies (EMEs),
prompting a few central banks in EMEs to tighten monetary policy.
 Sovereign bond yields have softened across AEs. However, in EMEs, bond yields remain relatively high on inflation
concerns and country-specific factors
 EME currencies have depreciated in the wake of portfolio outflows since mid-June as risk appetite ebbed, while the US
dollar has strengthened
OUR ANALYSIS & OUTLOOK
The Reserve Bank of India (RBI) kept its policy rates, stance and liquidity management decisions unchanged in August-
2021 was largely expected and following were the key pointers pertaining to the policy:
• Increase quantum of variable rate reverse repo (VRRR) of 14 day repo to INR 4 Lakh Crore from the current INR 2 Lakh
Crore by Sep 24, 2021
• RBI upped inflation projection to 5.7% from 5.1% for FY 22 and real growth outlook maintained at 9.5% for FY 22.
Source: RBI Policy Document
OUR VIEW
• Overall policy was on expected lines and growth concerns continue to take centre stage in MPC deliberations by
reinforcing its priority on reviving durable growth. However, the risks to inflation have also been adequately highlighted.
• Going forward, RBI may have to do a fine-balancing act. On one hand, support for growth trajectory is needed due to
second wave and on the other hand RBI would need to keep an eye on upside risk to inflation.
• The growth recovery got disrupted due to second wave, but we expect it to pick-up owing to aggressive vaccine roll-
out measures, easy liquidity conditions and fiscal support.
• Inflation trajectory need to be monitored closely on the back of: 1. Reflationary global environment 2. Commodity prices
getting heated up 3. Monetary policy is already expansionary and ample system liquidity.
• Based on the above two points of growth normalizing and upside risk to inflation, we continue to believe for a gradual
withdrawal of monetary stimulus.
• We believe, as the RBI gains comfort with growth picking-up, the first nudge would be to move the short-term rates
closer to the mid-point of the policy rate corridor. Increasing the quantum of VRRR is probably a first step in that
direction for absorption of surplus liquidity.
• Also, for the first time after many months, there has been a break in the unanimous decision of policy stance and the
growing dissent among the MPC members point towards future policy decisions which would be characterised by
giving due importance to inflation dynamics.
• As communicated earlier, we believe that we are at the fag-end of interest rate cycle and in the current phase where
growth and inflation dynamics is evolving, more nimble and active duration management strategy is recommended as
it may benefit from high term premium (difference in yield between the long and short end of the curve) and to manage
portfolios from expected high interest rate sensitivity
• We continue to recommend Accrual strategy with an aim to benefit from higher carry.
2
Monetary Policy
Statement, 2021-22
Data Source: RBI Monetary Policy Statement 2020-21 datedAug 06, 2021, Data Source for CRR & SLR: RBI

3. ICICI Prudential Credit Risk Fund (An open ended debt scheme predominantly investing in AA and below
rated corporate bonds) is suitable for investors who are seeking*:
Moderate
• Medium term savings
• A debt scheme that aims to generate income through investing predominantly in AA and below rated
corporate bonds while maintaining the optimum balance of yield, safety and liquidity
Inv estors understand
that their principal
will be at
LOW HIGH moderate risk
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Approach Scheme Name Call to Action Rationale
Short
Duration
Schemes
ICICI Prudential Savings Fund
ICICI PrudentialFloating Interest Fund
ICICI Prudential Ultra Short TermFund
Invest for parking
surplus funds Accrual + Moderate Volatility
Accrual
Schemes
ICICI Prudential Medium Term Bond Fund
ICICI Prudential Credit Risk Fund
Core Portfolio with >1 Yr
investment horizon
Better Accrual
Dynamic
Duration
Scheme
ICICI Prudential All Seasons Bond Fund Long Term Approach with >3
Yrs investment horizon
Active Duration and Better
Accrual
SCHEME RECOMMENDATIONS
DISCLAIMER
Mutual Fundinvestments are subjectto market risks, read all scheme related documents carefully.
None of the aforesaid recommendations are based on any assumptions. These are purely for reference and the investors are requested to consult their financial
advisors before investing. All data/information used in the preparation of this material is specific to a time and may or may not be relevant in future post issuance of
this material. ICICI Prudential Asset Management Company Limited (the AMC) takes no responsibility of updating any data/information in this material from time to time.
The AMC (includ- ing its affiliates), ICICI Prudential Mutual Fund (the Fund), ICICI Prudential Trust Limited (the Trust) and any of its officers, directors, personnel and
employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of
profit in any way arising from the use of this material in any manner. Nothing contained in this document shall be construed to be an investment advice or an
assurance of the benefits of investing in the any of the Schemes of the Fund. Sectors/stocks mentioned in the article do not constitute any recommendation and the
Fund through its schemes may or may not have any future position in these sectors/stocks. Recipient alone shall be fully responsible for any decision taken on the
basis of this document. The information contained herein is only for the purpose of information and not for distribution and do not constitute an offer to buy or sell or
solicitation of any offer to buy or sell any securities or financial instruments in the United States of America ("US") and/or Canada or for the benefit of US persons
(being persons falling within the definition of the term "US Person" under the US Securities Act, 1933, as amended) or persons residing in Canada.
RISKOMETERS
3
Monetary Policy
Statement, 2021-22
Please note that the Risk-o-meter(s) specified above will be evaluated and updated on a monthly basis as per SEBI circular dated October 05, 2020 on
Product Labeling in Mutual Fund schemes - Risk-o-meter. Please refer to https://www.icicipruamc.com/news-and-updates/all-news for more details.

4. 4
ICICI Prudential Medium Term Bond Fund (An open ended medium term debt scheme investing in instruments
such that the Macaulay duration of the portfolio is between 3 Years and 4 Years. The Macaulay duration of the
portfolio is 1 Year to 4 years under anticipated adverse situation) is suitable for investorswho are seeking*
Moderate
• Medium term savings
• A debt scheme that invests in debt and money market instruments with a view to maximize income
while maintaining optimum balance of yield, safety and liquidity
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
ICICI Prudential All Seasons Bond Fund (An open ended dynamic debt scheme investing across
duration) is suitable for investors who are seeking*: Moderate
•All duration savings • A debt scheme that invests in debt and money market instruments with a
view to maximise income while maintaining optimum balance of yield, safety and liquidity
LOW HIGH
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
ICICI Prudential Ultra Short Term Fund(An open ended ultra-short term debt scheme investing in instruments
such that the Macaulay duration of the portfolio is between 3 months and 6 months) is suitable for investors
who are seeking*: Moderate
• Short term regular income
• An open ended ultra-short term debt scheme investing in a range of debt and money market instruments
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
ICICI Prudential Floating Interest Fund (An open ended debt scheme predominantly investing in floating
rate instruments (including fixed rate instruments converted to floating rate exposures using swaps/derivatives)
is suitable for investors who are seeking*: Moderate
• Short term savings
• An open ended debt scheme predominantly investing in floating rateinstruments
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
*Investors should consult their financial advisers if in doubt about whether the product issuitable for them
Note: The Macaulay duration isthe weighted average term to maturity of the cash flows from a bond. The weight of eachcash flow is determined by dividing the present value of the cash flow by
the price.
RISKOMETERS
Monetary Policy
Statement, 2021-22
ICICI Prudential Savings Fund (An open ended low duration debt scheme investing in instruments such that the
Macaulay duration of the portfolio is between 6 months and 12 months) is suitable for investors who are
seeking*:
Moderate
Investors
understand that
• Short term savings
• An open ended low duration debt scheme that aims to maximize income by investing in debt and money
market instruments while maintaining optimum balance of yield, safety and liquidity
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Please note that the Risk-o-meter(s) specified above will be evaluated and updated on a monthly basis as per SEBI circular dated October 05, 2020 on
Product Labeling in Mutual Fund schemes - Risk-o-meter. Please refer to https://www.icicipruamc.com/news-and-updates/all-news for more details.