By Apurv Gupta, Founder & CEO, Otto Money:
“The repo rate is the main lever for interest rates in the economy. When the RBI raises it, interest on loans and deposits goes up. Though the bond yields increase, existing bond prices fall. All assets such as equities, gold and real estate usually move in the opposite direction. When rates rise, these asset classes tend to come under pressure, as borrowing becomes costlier and fixed-income options look more attractive. We are seeing a monetary tightening cycle and MPC has changed the stance. Short term bonds are the safer bet than playing duration.”
