Reserve Bank of India Repo Rate: Reserve Bank of India Governor Shaktikanta Das on Wednesday announced a hike in the repo rate. The Reserve Bank has increased the repo rate by 0.40%.
In this way the repo rate has increased from 4 per cent to 4.40 per cent. Earlier, the Reserve Bank last changed the repo rate on 22 May 2020.
“The deficit and volatility in the commodity and financial markets are getting worse,” Das said.
The government has intensified the war against inflation. It is noteworthy that inflation remained higher than expected for most of the years.
In its first unplanned rate change since the start of the corona pandemic, the Reserve Bank has increased its repurchase rate to 4.40 per cent. For the last two years, this rate has been stable at 4 per cent to support the economy.
It is noteworthy that policy makers at the Reserve Bank have been pointing out that rates may go up if consumer prices exceed the bank’s target range in the first quarter of 2022.
Reserve Bank Governor Shaktikanta Das said in his speech, ‘The condition of the world’s economy is deteriorating. Inflationary pressure continues in the economy. The ever-increasing inflation is worrying. Inflation and growth forecasts have changed because of the war. ,
Repo interest hike: What’s the impact on the public?
- The increase in the repo rate by the Reserve Bank will affect lakhs of customers of the bank.
- As soon as the central bank increases the repo rate, banks will increase the rate of loan given to the customers.
- The effect of increasing the interest rate is visible in the EMI.
- Home and auto loan borrowers will now have to pay more EMI than before.
What is Repo Rate?
The lending rate that the Reserve Bank provides to the banks is called the repo rate. Increasing the repo rate will create an environment where banks will have to take loans from the Reserve Bank at higher interest rates.
This will increase the interest rate on home loans, car loans and personal loans. This will have a direct impact on the EMI of the borrowers.