New Delhi, July 18 -- The rate cut cycle kicked off in early 2025. In February this year, Reserve Bank of India's (RBI) monetary policy committee (MPC) slashed the repo rate by 25 basis points to 6.25 percent after a gap of nearly five years.

In the two follow up policy meets, which took place in April and June, RBI cut the repo rate by another 75 basis points, thus reducing the interest rate by a total of 100 basis points. The current repo rate stands at 5.5 percent.

For those who are not aware -- whenRBI cuts the repo rate, bond yields start falling, thus raising the prices of debt instruments. As a result, it props up the net asset value (NAV) ofdebt mutual funds, which invest in these bonds. This is because thebond prices and yields...