Get ready for expensive loans! RBI may once again increase the repo rate by 25 bps

RBI Repo Rate May Hike Again: The Reserve Bank of India is once again looking at increasing the repo rate. In order to reduce the inflation rate, the country’s central bank can take a decision to increase it again. The six-member panel, including Governor Shaktikanta Das, will announce the first monetary policy for FY2024 later this week and may once again hike the repo rate by 25 bps. The next review meeting of the Monetary Policy Committee will be held on 3, 5 and 6 April. There will be no meeting on April 4 due to Mahavir Jayanti.

Many experts believe that this increase of RBI will be the last. RBI has increased the repo rate by 250 basis points since May last year. The Reserve Bank has increased the rates to keep the country’s economy strong and reduce the inflation rate. Right now the repo rate of RBI is 6.50 percent.

CPI inflation rate more than 6 percent for two months

The last time the central bank had increased the repo rate by 25 bps in the last meeting on February 8. Earlier in December 2022, there was an increase of 35 bps. India’s CPI inflation in February 2023 was at 6.44 per cent, although it was higher than expected. This was the second consecutive month when the inflation rate between November and December has been more than 6 percent after coming down.

EMI burden falling on people

Due to the increase in the repo rate, the banks have also increased the loan interest, as many times as the RBI repo rate has increased, the same number of times the banks have increased the loan interest. Banks have increased the loan interest by about 2.50 per cent. In such a situation, the pressure of monthly installment has increased on the people and if RBI increases the repo rate this time also, then the EMI of the banks will increase further.

Inflation rising globally

According to Mint’s report, apart from India, central banks like US and UK have also increased their rates. In these countries too, rates have been increased several times to control inflation. For example, the US Federal Reserve has been closely monitoring the hike data in the last several reviews at its March Open Market Committee meeting.

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