Some debt fund categories gain as rates decline, but FDs lose out
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New Delhi, Dec. 5 -- The Reserve Bank of India's (RBI) monetary policy committee met for the last time in calendar year 2019 and in a surprise move paused the rate cut cycle keeping the repo rate at 5.15%. However, it maintained the stance as accommodative, signalling that the rate cut cycle is not over. RBI governor Shaktikanta Das emphasized the importance of the transmission of past cuts to the lending rates soon to help revive the flagging economy.
A flip side to the lending rates coming down is that the deposit rates offered by lenders such as banks also comes down. "The transmission to deposit rates has been only around 10 basis points (bps) against the 135 bps cut in repo rates in this year. The deposit rates need to go down furth...
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