RBI increased the repo rate by 25 basis points for the sixth time, whip on the common man again, EMI of home loan became expensive
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Mumbai : The Reserve Bank of India (RBI) has lashed out at the common man even once. During the monetary policy review on Wednesday, the central bank has decided to increase the policy interest rate repo rate by about 25 basis points (basis point) or 0.25 percent. In less than a year, the RBI has announced an increase in the repo rate for the sixth time to make loans costlier. With this move of RBI, the repo rate has increased to around 6.50 per cent.
Loan will be costlier and loan EMI will increase
Policy interest rate i.e. repo rate is the interest rate at which commercial banks borrow from the central bank to meet their immediate needs. An increase in this means that the loan taken from banks and financial institutions will be costlier. RBI will give loans to the country’s banks and financial institutions at an expensive interest rate. This will increase the monthly installment (EMI) of the existing loan. The common man is affected by the increase in the repo rate of RBI. If the RBI makes the loan given to the banks expensive, then the banks of the country recover it from the customers who take the loan.
GDP estimate rate hiked
Along with this, the central bank has increased the estimate of the gross domestic product (GDP) growth rate for the current financial year 2022-23 from 6.8 percent to 7 percent. At the same time, the GDP (Gross Domestic Product) growth rate has been estimated to be 6.4 percent in the next financial year. RBI has projected retail inflation to be 6.5 percent in the current financial year and 5.3 percent in the next financial year.
MPC decided to increase the repo rate
Giving information about the decision taken in the three-day meeting of the Monetary Policy Committee (MPC), which began on Monday, RBI Governor Shaktikanta Das said in a digitally broadcast statement that considering the current economic situation, the MPC has decided to keep the policy rate repo rate at 0.25. It has been decided to increase the percentage to 6.50 per cent. He said that out of six members of the Monetary Policy Committee, four voted in favor of increasing the repo rate.
Repo rate hiked for the sixth time
However, this pace of increase in the repo rate is less than the increase in the previous five times and the market was expecting it. RBI has increased the repo rate by 2.50 percent in total six times since May this year mainly to bring inflation under control. Earlier, the repo rate was increased by 0.40 per cent in May and 0.50-0.50 per cent in June, August and September and 0.35 per cent in December. While deciding on the policy rate, the central bank primarily takes into account retail inflation.
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