RBI hikes repo rates by 0.5% – EMI and Lonas will be expensive: Get ready for expensive home loans and vehicle loans. Actually, the Reserve Bank has announced an increase in repo rates by half a percent to control inflation.
Repo rates have a direct impact on the loans given to customers through banks. With the increase, now the repo rates have increased to the level of 5.9 percent. Along with this, the SDF rate has also been increased by half a percent.
With inflation reaching back to 7 per cent in August, there were speculations that the central bank would continue to take a tough stance on rates. Earlier, the Federal Reserve had also increased interest rates sharply. After which central banks around the world have also shown strictness.
What did the governor say in the policy
According to the Governor of the Reserve Bank, 5 out of 6 members in the MPC were in favor of an increase of half a percent. After which the rates have been increased from 5.4 percent to 5.9 percent. According to the governor, due to these steps, inflation is expected to come down in the coming time and the inflation rate may come down to 6 percent between October and March, which is currently at the level of 7 percent. The Reserve Bank estimates that between January and March, the inflation rate will come within a satisfactory range of 2 to 6 percent.
Increased for the fourth time
The increase in September is the fourth consecutive increase made by the Reserve Bank, before that in the review of August and June, the repo rates were increased by half a percentage point. At the same time, during May, the Reserve Bank suddenly increased the rates by 0.4 percent. With today’s increase, repo rates have reached a 3-year high. With the increase, loan rates will also become expensive. It is anticipated that banks will soon start announcing loans to be expensive.
RBI to announce bi-monthly monetary policy today
The Reserve Bank of India will announce its bi-monthly monetary policy today. The three-day meeting of the Monetary Policy Committee of the Reserve Bank began on Wednesday. Economists expect the central bank to increase the repo rate by fifty basis points today. At present the repo rate is 5.4%. The central bank has increased the repo rate by 140 basis points since May.
The Reserve Bank is reviewing monetary policy at a time when central banks of many countries are receiving warning signs of a global recession from the International Monetary Fund and the World Bank.
