By Saurabh Jain, Co-Founder & CEO, Stable Money.
“With inflation moving higher in recent months and pressures becoming more broad-based, the October MPC meeting will be closely watched. A 25 bps point increase in the repo rate is increasingly being expected, which would take the rate from 5.25% to 5.50%. The RBI’s assessment of the persistence of inflation, along with the resilience in economic growth, will remain important in determining the policy stance.
For investors, a potential rate hike could create an opportunity to lock in relatively attractive rates across fixed income products such as FDs and bonds. However, investment decisions should not be driven only by expectations around the next rate move. Investors should consider their financial goals, investment horizon, liquidity requirements and the underlying credit risk before choosing an instrument. In a changing rate environment, maintaining a diversified fixed income allocation and matching the tenure of investments with financial goals can help investors navigate different interest rate cycles with greater predictability.”