New Delhi: The meeting of the Monetary Policy Committee (MPC) of RBI will begin on Monday, 6 February. This three-day meeting will continue till February 8. Probably on Wednesday, RBI Governor Shaktikanta Das will tell whether any increase in policy interest rates ie repo rate is being done or not. According to the news, RBI will increase the interest rates this time also. However, there will definitely be a decrease in its growth rate. According to analysts, the repo rate can be increased by 25 basis points or 0.25 percent. Last year, RBI increased the repo rate 5 times and took it up to 6.25 percent.
In the meeting held in December last year, the MPC decided to increase the interest rate by 0.35 percent. The total increase was 225 basis points or 2.25 percent. In this, the interest rate was increased three times by 0.50 percent. With the increase in the repo rate, it becomes expensive for banks to take money from RBI and its direct impact is visible in the common man’s pocket. Banks also make loans costlier for the customers. Home loan interest rates have already crossed 8.50 percent. There is a possibility of it going up further due to increasing in interest once again.
Buying a house-car will be expensive
If interest rates increase, almost all types of loans will become costlier. Banks increase the interest due to an increase in repo rate by RBI. Actually, most of the bank’s interest rates depend on external factors, the biggest factor is the repo rate. However, one benefit of this reaches the investors. People who invest money in bank FD start getting more interest. We have seen examples of this last year. Many banks are offering 7% or more interest on FD.
Inflation decreased
The inflation rate is currently within the satisfactory range of RBI. However, it had gone above 6 percent since January last year. But, by the end of the year, the retail inflation rate reached 5.72 percent. This was the lowest level in a year. According to Sunil Sinha, chief economist of India Ratings, by the first quarter of 2024, the inflation rate will come down to less than 5 percent.
