With the latest rate cut announced by the RBI, we have had a 100 basis point cut in about a year. That is significant. What do interest rates heading south mean for the market? Well, there are several sectors whose fortunes are closely linked to the rate of interest. For example, many consumption items are brought on credit and lower interest rates mean that people are paying lower EMIs. Combined with the tax relief announced in the last budget, it means more money in the hands of consumers. And that means consumption of some goods may increase.
