RBI’s Monetary Policy Committee Meeting Begins to Decide on Repo Rate
The Reserve Bank of India (RBI) has begun its three-day Monetary Policy Committee meeting to review the country’s monetary policy. The RBI reviews monetary policy every 45 days, where important issues such as repo and reverse repos are discussed. This review will determine whether loans will become more or less expensive in the country and what changes will be made to FD interest rates.
In the last year, loans in India have become more expensive with home loan interest rates increasing by 2.5%. This increase has resulted in higher installments for borrowers, leading to financial pressure. Car loans and personal loans have also experienced higher installment rates. The decisions taken during the monetary policy review meeting on June 8, 2023, will reveal whether loans will become costlier or cheaper.
Experts predict that the RBI will maintain the status quo on the repo rate, which currently stands at 6.5%. This decision could provide much-needed relief to borrowers. The RBI has previously increased the repo rate from May 2022 to February 2023 to control inflation, with a 2.5% increase within a year. This decision stabilized the repo rate at 6.5% during the MPS meeting in April 2023.
Retail inflation based on the Consumer Price Index (CPI) fell to an 18-month low of 4.7% in April 2023. Governor of the Reserve Bank, Shaktikanta Das, estimated that this figure could decrease further in May. Due to a reduction in inflation, it is expected that the repo rate will be kept stable during the current meeting.
In conclusion, the RBI’s Monetary Policy Committee meeting will determine whether loans become more or less expensive in India. Experts predict that the repo rate will remain stable, providing relief to borrowers. The RBI’s decision will be announced on June 8, 2023.
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