RBI hiked the repo rate
by 40bps to 4.4%
RBI hiked the repo rate
by 40bps to 4.4%
What is the repo rate?
Repo rate is the rate at which RBI lends money to commercial banks like HDFC, ICICI, etc. when in need.
This rate is used by central banks and monetary authorities to control inflation.
What is the repo rate?
As you already know the inflation is high, in order to control this RBI increased the repo rate to squeeze the flow of money.
Impact of the increased repo rate?
Positive: You will get a better return on Fixed deposits.
Negative: Interest rates on loans would be higher.
Impact on the stock market?
Companies with high debt will be impacted since they would have to spend more on interest payments.
Impact on the stock market?
Therefore it's better to invest in debt-free companies during such time.
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