The Reserve Bank of India had recently increased the repo rate. Due to the rate hike last month and the highest inflation rate in eight years, experts expect the RBI to hike its rates once again in June. At the same time, in a recent Reuters poll, experts also believe that the Reserve Bank will increase rates in the meeting to be held in June.
According to a Reuters poll, more than a quarter of 53 economists expect the RBI to increase growth by 35 basis points to 4.75% while 20 expect a hike of 40-75 basis points, with ten at 50. Estimated growth of basis points.
When will the rate increase
Research firm Nomura has said in a note that the RBI can increase by 5 bps and 200 percent in the third quarter of 2023. Significantly, the Reserve Bank of India had increased benchmark lending rates by 40 bps in an unscheduled meeting on May 4. Along with this, the cash reserve ratio was increased by 50 bps. This increase was done for the first time since 2020 and now it is expected to increase once again.
What does research say
Research by Nomura says that the Reserve Bank of India is expected to increase by 35 bps in June, 50 bps in August and 25 bps in April 2023. That is, there is a possibility of 5.75% repo rate in December and 6.25% repo rate by April 2023. Apart from this, the cash reserve ratio is also likely to increase by 100 bps by 2023. Headline retail inflation rose to 7.8% on an annualized basis in April, the highest since May 2014.
What will be the effect of hike in rates
If there is an increase in the meeting to be held by the Reserve Bank in June, then banks can also increase their rates, which means that the EMI of home loan, personal loan, auto or any kind of loan will increase for people. . Also, due to the increase in the repo rate, many other sectors can also be affected. People may have to face high inflation. However, due to the increase in the repo rate, the FD rates of the bank can also improve.