Mumbai From today, a meeting of the Monetary Policy Committee MPC of the Reserve Bank of India i.e. RBI is taking place. The MPC meeting of RBI is being held under the chairmanship of Governor Shaktikanta Das. Loan borrowers are keeping a close eye on the MPC meeting of RBI. They hope that after the MPC meeting, there will be some reduction in the repo rate and this will reduce the EMI of their loan. However, due to the condition of the world economy and the tremendous tension between Russia-Ukraine and Israel-Iran, RBI’s decision to cut interest rates will not be easy.
Recently, the Federal Reserve of America had cut its interest rates by 50 basis points for the first time in 4 years. After this, it is expected that RBI may also cut the interest rates, especially the repo rate. Repo rate is directly related to loan interest rates. If the repo rate decreases, the EMI on the loan will also decrease. Whereas, EMI increases due to increase in repo rate. After the start of the Russia-Ukraine war, RBI had increased the repo rate in view of the economy and continuously increasing inflation. RBI’s repo rate is currently 6.5 percent. Inflation is also under control by maintaining the repo rate at 6.5 percent. RBI has decided to keep the inflation level between 4 to 5.5 percent.
Repo rate is the interest rate at which RBI lends money to other banks. Due to high repo rate, banks do not have much money. In such a situation, even the common man has less money. Due to less currency in the market, it is affected and due to less purchasing, inflation is also controlled. Now it remains to be seen whether RBI gives you the gift of reducing the loan EMI or continues to take steps to keep inflation under control by maintaining the repo rate.
