With this, the rates will go up to 4.4 per cent from the current four per cent. RBI raises interest rates on commercial banks The repo rate is the lending rate. So even slight movements in the repo will be reflected in the market. In the last monetary policy, the RBI Banks had hiked deposit and lending rates by 10 basis points in the belief that repo rates would increase. However, the RBI said the rate hike could be considered at the next meeting.
It is estimated that in the event of a 40 basis point hike in rates, banks will immediately raise lending rates by at least 25 basis points. This can lead to higher EMIs and so on. Currently, rates are at an all-time low after Kovid. Banks are also likely to raise deposit rates. The rate hike will be a boon for those who have a fixed deposit of retirement money and are therefore looking for a livelihood.
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It is also noteworthy that the RBI’s immediate intervention comes ahead of the release of the April inflation report. U.S. The Fed meeting is also in progress. With just hours to go before the Fed’s decision, the RBI Increased foxes. The Federal Reserve has said it will take “severe action” if inflation picks up.
Other evaluations and decisions
- Inflation is expected to pick up in April.
- SDF, MSF Change in rates. SDF 4.15 per cent and MSF. 4.65 per cent.
- The repo rate will change for the first time since August 2018.
- The Reserve Money Ratio (CRR) has been increased by 50 basis points.
- Interest rate intervention aims to strengthen and consolidate interim economic growth potential: Shaktikanta Das
- Potential for volatility in stock markets. It fell more than 1,000 points.
- International growth is slowing.
- Updated C.R.R. The rate is effective from May 21.
- Foreign reserves raise more than $ 600 billion.
- GDP-to-debt ratio is low.
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How will it affect borrowers?
The RBI’s unexpected rate hike will put a lot of pressure on borrowers and borrowers. Banks have been waiting for the RBI to raise interest rates. Many respond that it is too late to raise the repo rate.
If you are sitting on a loan you need to do it as soon as possible. You have to move faster than the banks. The EMI (monthly) of existing home and auto loans and other loans will increase immediately. The rate hike may change depending on the banks.