RBI Repo Rate Raised By 25 Bps: What It Means For NPS Subscribers

Apurv Gupta, founder & CEO, Otto Money, a wealth management platform, says, “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 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 the MPC has changed its stance. Short-term bonds are the safer bet than playing duration.”