What The RBI Interest Rate Status Quo Means For You

  Author: Jai Prakash

In its latest monetary policy review, India’s central bank, Reserve Bank of India, on April 5 has left its policy rates unchanged. This has been primarily influenced by concerns related to expected inflationary pressures, especially those emanating from factors such as food inflation, implementation of Seventh Pay Commission recommendations and the one-time impact of the implementation of Goods and Services Tax (GST).  Whether you are a loan customer or an investor, here are some implications for you

What RBI interest rate decisions means you The interest rates for loans such as home loans are unlikely to get any fresh impetus to come down though many experts would argue that there is still scope for banks to pass on RBI’s previous rate cuts. Interest rates for fixed deposits (FDs) are unlikely to face fresh pressure for interest rate cuts. Debt fund investors are unlikely to see in 2017 the kind of gains they witnessed in 2016. For instance, shorter term debt funds and liquid funds are already in the range of 8.61% and 6.91% respectively.  Clearly, in the coming months, when it comes to interest rates, it will more about doing the best with what’s available rather than waiting for an upside to happen.