New Delhi: The Reserve Bank of India (RBI) on Wednesday afternoon announced an unexpected decision that had a serious impact on the country’s economy. Immediately after the announcement of the Reserve Bank, the Indian stock market was in turmoil. With the opening of LIC’s IPO, the BSE Sensex, which has been in the green zone since this morning, saw a sudden red mark. Within minutes of the calculation, the market fell by 1300 points. So there is a fear that even those who are suffering from inflation will be burdened with more and more household budgets.
The Reserve Bank of India (RBI) on Wednesday hiked the repo rate. The long-standing fixed repo rate of four per cent has now risen to 4.40 per cent. Reserve Bank Governor Shaktikant Das has announced an increase in rates ahead of the next policy review. As a result, now Home, Auto and Personal Loan will become more expensive and the burden of EMI will increase. This increase in repo rate has hit borrowers hard
Reserve Bank Governor Shaktikant Das said the central bank’s monetary policy committee had convened a meeting to discuss the state of the economy. At the meeting, MPC members unanimously decided to raise the repo rate by 0.40 per cent. The MPC has taken this decision due to uncontrollable inflation.
Ordinary people’s budget will deteriorate
An increase in the repo rate will increase the burden on the pockets of the common man. EMIs will now make a big dent in the budgets of ordinary people who are already facing inflation. Following the central bank’s decision, interest rates on all types of loans, including home loans and car loans, will increase, leading to an increase in EMI. Because the loan cost of banks will go up. The repo rate is the rate at which a bank borrows from the Reserve Bank. As it grows, bank loan costs will increase and it will fall on consumers. This will make home loans, auto loans or personal loans all more expensive in the near future.
There will be no relief from inflation
The RBI fears that there will be inflationary pressures in the current financial year. According to the RBI, inflation is projected at 5.7 per cent in FY2022-23. Shaktikant Das said last month that inflation could be 6.3% in the first quarter, 5% in the second quarter, 5.4% in the third quarter and 5.1% in the fourth quarter.