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RBI Repo Rate Hike: EMI Will Be More Expensive! RBI MPC meeting starting from Wednesday

RBI Repo Rate Hike: The three-day Monetary Policy Committee meeting of the Reserve Bank of India is going to start from Wednesday 28 September 2022, which will continue till 30 September. On September 30, RBI Governor Shaktikanta Das will announce the decisions taken in the meeting. And it is expected that the RBI’s Monetary Policy Committee can take a decision to increase the repo rate by 50 basis points i.e. half a percent. Repo rate can be increased from 5.40 percent to 5.90 percent. If this happens then you can be hit by inflation because your EMI can be expensive.

Why will the repo rate increase?
In the month of August, the retail inflation rate has been 7 percent. So this is more than the RBI’s tolerance level of 6 per cent. In such a situation, RBI can increase the repo rate for the fourth consecutive time in the policy meeting. JP Morgan to Morgan Stanley believe that RBI can increase the repo rate by 0.50 percent. Morgan Stanley has said in his report that, earlier we had estimated that the repo rate could be increased by 35 basis points. But after the rise in inflation and the attitude of central banks around the world, we estimate that the repo rate can be increased by 0.50 percent.

What will be the effect!
After increasing the repo rate of RBI, it will become costly for banks to take loans, which they will pass on to the customers. From home loans to car loans, education loans and business loans, all will become costlier when the repo rate increases. For those who are already running repo rate based home loans, their EMIs will become expensive.

Repo rate has increased three times
In 2022, RBI has increased the repo rate by 1.40 percent. For the first time in May, the RBI increased by 40 basis points, for the second time in June by 50 basis points and then in August by 0.50 per cent. Recently, the Central Bank of America and Britain has made loans expensive. After which RBI can also increase interest rates. However, with this increase, the process of raising interest rates is also expected to stop here as there is a possibility of reduction in inflation due to reduction in commodity prices in the coming days.

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