Inflation Rate: The Reserve Bank of India (RBI) has increased the repo rate by 50 basis points. This will also make your EMI costlier. Now the repo rate has increased from 5.40% to 5.90%, while the SDF rate has increased from 5.15% to 5.65%. 5 out of 6 MPC members were in favor of raising the rates. RBI said that inflation still remains a matter of concern for all sectors. Earlier, many of the world’s largest central banks, including the US Federal Reserve, have increased interest rates.
Repo rate increased by 1.90 percent since May
Earlier in May, the central bank suddenly increased the interest rate by 0.40 percent. According to this, the repo rate has increased by 1.90 percent since May.
Loans will become more expensive in the coming times, due
An increase in the repo rate will increase the cost of borrowing i.e. the cost of borrowing. If the banks find money expensive, then in the coming time the loan will become more expensive. Banks will pass this on to the customers. This is expected to increase the sales of homes further.
What is Repo Rate?
The Repo rate is the rate at which the RBI lends to the bank and on the basis of which the bank gives loans to the customers, whereas the reverse repo rate is the rate at which the RBI lends them to the bank on deposits. pays interest. In such a situation, when the RBI increases the repo rate, the burden on the bank increases, and the loan becomes expensive from the bank at the bank rate.
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