RBI hiked the repo rate by 25 bps and the new repo rate is 6.50%. This is the second time the RBI has hiked the repo rate in this financial year. Further rate hikes are anticipated depending on inflation and other macro factors. In a rising interest rate environment you are better off investing in Liquid Mutual Funds and Ultra Short-Term Mutual Funds over Long Term Debt Mutual Funds and Bonds.
Here is how the interest rates and returns of your portfolio will be affected by the Repo Rate hike.
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*Returns on Stocks and Equity Mutual Funds are affected by various other factors.
