The Reserve Bank of India has been in the news for continuously raising interest rates - as much as 13 times in 19 months, trying hard to control inflation which seemed to be unaffected by these interest hikes! People who had taken loans had to face a hike in their EMIs almost every 2 months & groaned at every instance of rate hike. High interest rates coupled with global uncertainties, put brakes on the high growth rates that India was exhibiting and all industries were up in arms against the rate hikes that RBI was bringing about. However last week RBI announced a cut in the CRR which is a signal that RBI has now decided to soften its stand. Though it has left interest rates unchanged, the CRR cut would infuse more liquidity in to the economy which came as a welcome relief to the industries & the stock market.
But what does this mean for a retail investor?