Home, Car Loan People with various types of loans have been waiting for their EMIs to be reduced for a long time. This is bad news for them. Their EMI burden is not going to reduce any time soon. In fact, retail inflation dropped to a ten-month low of 4.85 percent in March. Earlier, retail inflation was 5.09 percent in February and 5.1 percent in January. Despite this, people paying EMI of Home-Car Loan are not going to get relief soon. Banking experts say that in view of increasing global risks including geopolitical tensions, rise in crude oil prices, the Reserve Bank of India (RBI) may delay the reduction in policy rates.
Expectation of relief only at the end of the year
Kotak Institutional Equities said that we stand by our appeal of cutting rates by half a percent in the third quarter of the current financial year. Despite this, we feel that RBI’s rate cut may be further delayed due to rising crude oil prices, delay in the US Federal Reserve’s rate cut cycle and high food inflation. The brokerage company said inflation in the near term is expected to remain subdued due to rising food inflation, geopolitical risks and supply cuts by OPEC+ countries leading to higher crude oil prices and higher prices of non-energy commodities in FY2024. There is a risk of average retail inflation being above five percent in the first quarter of -25. As the RBI Governor has also said, these risks may pose a challenge to the last leg of reducing inflation.”
Expectation of gradual decline in inflation
The brokerage said we expect only a gradual moderation in overall inflation. Motilal Oswal Financial Services said in a report that inflation and IIP data were in line with expectations, with no major impact on monetary fiscal policy. The brokerage company said that we expect the retail inflation rate next year to be an average of 4.5 percent. In our view, a rate cut could happen only towards the end of FY 2024-25.
Input: IANS
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