If you have taken home loan, auto loan or any kind of loan then it is not going to getcheap in near future.RBI has not made any change in the rate in its Monetary Policy Committee meeting. The Reserve Bank has retained the repo rate at 4% and the reverse repo rate of 3.35%.
MPC voted to keep rates stable
The Reserve Bank holds meetings every two months about changing rates or not. RBI Governor Shaktikanta Das has projected a growth of 10.5% in gross domestic product (GDP) for 2021-22. The MPC meeting began on February 3.
Experts say that the MPC’s decision was as expected. There can be relief from inflation in the coming days. In such a situation, RBI rates will also come down. Overall, the decision of the MPC is good for development and financial stability.
Reduction in repo rate by 115 basis points so far
Experts had already hoped that the RBI would avoid a cut in the Repo rate. Repo rate is the interest rate on loans given by RBI to banks. This is the first meeting of RBI after the Budget 2021-22 presented on 1 February. The Reserve Bank has cut the repo rate by a total of 115 basis points since February last year.
Reverse repo rate also stable
The MPC did not make any changes in the key policy rates in the last 3 meetings. Currently the repo rate is 4%, which is at a 15-year low. At the same time, the RBI has also maintained the reverse repo rate at 3.35%. Reverse Repo rate is the rate at which RBI borrows money from commercial banks.
Interest rates may go up
In the upcomingperiod, the loan rates can go up, as the Reserve Bank did not reduce the rates. The Reserve Bank is now focusing on inflation and growth. The government is also focusing on increasing growth. In this way, the growth rate will stop the decrease in interest rates and may increase in the future. Some bank chairman believe that interest rates may go up after May-June. Because by then the economic situation may be right and demand may increase. The corona will be under control by then. In such a situation, if you want to take a loan, then it can be the last round of cheap loan.
Also read: Banking Failures in India
Foreign investors showing confidence
The Consumer Price Index (CPI) for the fourth quarter of the current financial year is projected to be 5.2%. It was earlier estimated at 5.8%. Shaktikanta Das said that foreign investors are trusting the Indian economy. As a result, FDI and FPI investment flows have steadily increased in recent months.