Professional Documents
Culture Documents
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AGENDA
@ What is base rate and why the move
@ Effect analysis of base rate system
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EFFECT ANALYSIS OF BR
@ Transparency
@ Transmission of policy rates
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CORPORATE BORROWINGS
^Companies borrow
mainly to fund their
long-term expansion
plan and for their
annual capital
expenditure.
^However there are
few expenses which
companies have to
fund on continuing
basis irrespective of
levels of interest
rates.
^Hence some amount
of borrowing will
always be made to
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fund continuing
operations like
working capital
requirements.
INVESTMENT ACTIVITY
^Equities as an asset
class tend to
underperform when
interest rates increase.
Investors and market
participants are well
aware of this
correlation.
^Looking at the data, it
is safe to say that when
interest rates are high,
investors prefer to trade
and invest in fixed
income money market
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6 instruments over equity
stock markets and vice
versa
Thank You