Debt to further increase loan EMIs? Attending the meeting with Reserve Bank officials
The repo rate has been increasing gradually due to the RBI. Because of this, the middle class is in deep trouble. Along with the hike in repo rates, EMIs are also rising. In this instance, the Monetary Policy Committee meeting of the Reserve Bank began on Monday. Since April 3, RBI officials have been in discussions. The general public is therefore concerned that the repo rate will be raised once more. In that situation, the loan’s EMI will go up. Personal, housing, and auto loans will increase in cost.
According to sources, the Reserve Bank of India may increase the repo rate by an additional 0.25 percent following this conversation. Given that current retail inflation has exceeded 6 percent and that numerous central banks, including the US Federal Reserve, have increased interest rates concurrently, the RBI may follow suit in this regard.
Some experts, however, are optimistic about one thing. The policy rate decision is likely to come out on April 6. Even if the repo rate rises in that case, experts say the rate hike starting in May 2022 is likely to be the last Even if the repo rate rises in that case, experts say the rate hike starting in May 2022 is likely to be the last. Which means the repo rate is likely to be hiked for the last time this season.
The RBI has been raising the repo rate continuously since May 2022 to control inflation. In this case, the repo rate has increased from 4 percent to 6.50 percent. This means the repo rate has increased by 2.50 percent in just one year.This has hit the pockets of the borrowers.In February, the repo rate was also increased by 0.25 percent.
Several issues will be discussed in the MPC meeting. Only then will a decision be made on the repo rate. It is believed that the decisions of the American Federal Reserve, European Central Bank, and Bank of England will also be considered.
Inflation based on the Consumer Price Index (CPI) stood at 6.52 percent in January and 6.44 percent in February, experts said. Retail inflation has been higher than the Reserve Bank’s target of 6 percent. Experts said that in this case, the interest rate may be increased by 0.25 percent.
Although the repo rate has increased for the time being, several experts believe that the central bank may reduce it in the next few months. Because experts believe inflation will come down below 5 percent soon, it goes without saying that the RBI will also cut the repo rate if that happens.
Also Read: