RBI Repo Rate Policy Unchanged- Where Should You Invest?
Reserve Bank of India(RBI) has surprised the entire market by keeping the repo rate unchanged in the monetary policy as announced on Wednesday, 08 December 2016. They believe to maintain the rate stable at present as they have adopted the wait-and-watch approach. Apart from the instability in the market post demonetisation, the investors have gained considerable benefits until now. So let us take a quick view of the current scenario and understand which investment is the best at present!
Due to demonetisation and Trump’s win in the USA, the Indian market is facing fluctuations at a rapid speed which has made the investment market highly volatile. With the fall in SENSEX and NIFTY, the investors on one side have gained the advantage of additional purchase or new investments at quite low prices, while their worth of investment values is reduced for sometime. But with a hope that the market shall rise in the coming future the investors are waiting for the right moment to gain high returns.
On the flip side, the banker and market were in the hope of rate cuts by 25-50 basic points in the Fifth Bi-Monthly Monetary Policy, but RBI’s announcement was contrary to this. The following are the major points that are covered in the fifth bi-monthly monetary policy statement:
- The repo rate is kept unchanged at 6.25%, while the reverse repo rate is 5.75%.
- The CRR(Cash Reserve Ratio) is left unchanged at 4%.
- The growth forecast has been cut from 7.6% to 7.1% for this fiscal.
- RBI has set the target inflation at 5% for March 2017.
- Due to the cash clampdown, inflation shall fall by 10-15 basic points in October to December.
- The effect of demonetisation will be short-run disruptions in the sectors which are cash intensive.
Accordingly, now is the actual time to stay calm and wait for positive movements in the market. At present, the experts have observed that the long-term investment which gets affected due to market moves must not be made as one can lose their money. So for now, we recommend the debt mutual funds to be the most effective tool which can be opted by the investors in order to gain income irrespective of market fluctuations.
The experts have further recommended to bet on the short-term debt schemes of mutual funds as they are least volatile to market fluctuations. You can get the best advice to avail the maximum benefits of the current opportunities in the mutual fund industry by availing the financial advisory services. Our team of fund analysts at MySIPonline has wide experience, and they can help you in gaining the best advantage and maximum profits.
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