Kuvera's video: Repo Rate unchanged at 6 50 in RBI MPC meet on 6 April 23 Market Beat

Between May 2022 and February 2023, the Reserve Bank of India hiked its repo rate by a total of 250 basis points to tame runaway inflation. While inflation remains high, the RBI on April 6 surprisingly decided to keep its repo rate unchanged. So, what prompted the RBI to hit a pause? While the growth-inflation balance is the usual suspect, it could also be the ripple effect from the collapse of a couple of banks in the US and one in Switzerland. RBI Governor Shaktikanta Das did not mention the name of the banks in his speech on monetary policy, but in his opening remarks he did mention “fresh headwinds from the banking sector turmoil in some advanced economies.” So, after seeing a rise in EMIs every two months since last year, there is some relief for borrowers. But once should keep their fingers crossed for now as the governor did warn that the Monetary Policy Committee that decides the repo rate will be ready to act, should the situation so warrant. One should also be well prepared as the governor while talking of inflation choose to quote Kautilya – “Be not slack before the whole job is finished.” However, if this turns out to be a pause before a cut in rates as everyone will be hoping, it may be a good time to lock in your fixed deposits at current rates. And why is that? The interest rate on fixed deposits is mainly a function of two variables – How much is the repo rate and how desperate are banks for your money? The liquidity in the banking system, which indicates the desperation of banks for your deposits, has mostly remained comfortable. This leaves the repo rate to be the prime driver of how much your fixed deposit will earn. If the RBI decides to cut the repo rate in future, you will lose out on the opportunity to lock in on one of the highest interest rates in the past couple of years. Stay updated with super cool videos on investing. Subscribe to Kuvera Channel https://bit.ly/3bawMXK Follow the conversations across Kuvera.in on Twitter : https://twitter.com/Kuvera_In Facebook : https://www.facebook.com/kuvera.in/ Linkedin : https://www.linkedin.com/company/kuve... To watch more Insights on Market and Mutual Funds, Kuvera Insights Playlist : https://www.youtube.com/playlist?list... To start your investing journey hop over to: https://kuvera.onelink.me/t2AP/75vhvlau —-------------------------------------------------------------------------------