From a consumer perspective, this will increase the cost of funds for financial institutions Says Mr Anand Varadarajan, Asit C Mehta Financial Services
Below View On RBI policy by Mr Anand Varadarajan, Director, Acit C Mehta Financial Services Ltd
"From a consumer perspective, this will increase the cost of funds for financial institutions and thereby increase interest rates and EMI for people/households. This in turn should reduce demand and inflation due to lower purchasing power in the hands of consumers. From an investor perspective, fixed-income investors would benefit from high-interest rates, FDs, debentures, bonds, etc. While equity investors will need to realign their investments from rate-sensitive sectors like auto, consumer discretionary, etc
However, looking at the reducing pace of rate hikes it seems we are nearing the end of the rate hike cycle, thereby reducing the probability of a sharp correction in equities"
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