Home, Car Loans to be impacted!
On Friday, the RBI Monetary Policy Committee led by Governor Shaktikanta Das hiked Repo Rate by 50 basis points to 5.90 percent.
Repo is the rate at which the Reserve Bank of India lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation. This is the third hike since the beginning of the current financial year, taking the rate back to pre-pandemic levels in order to tame the inflationary pressure.
The six-member Monetary Policy Committee headed by Reserve Bank of India Governor Shaktikanta Das started deliberations on the bi-monthly policy review on Wednesday.
Addressing a press conference, RBI Governor Shaktikanta Das said that there is nervousness in the financial market, and the global economy is in the eye of a new storm. Further, He added that the Indian economy continues to be resilient in the midst of global turmoil.
Additionally, World is in the midst of a third major shock from aggressive monetary tightening by central banks, Das said.
With a hike in repo rate, EMIs for home, car and personal loans are also likely to go up. Home, car and personal loans will become more expensive as the cost of borrowing will go up for banks, leading to a rise in lending rates.
Moreover, Indian markets opened on a watchful note ahead of the Monetary Policy Committee (MPC) decision announcement by Shaktikanta Das. Sensex opened 0.28 per cent down at 56,251.19 whereas Nifty50 opened at 16,818.10. Indian Rupee, on the other hand, rose 14 paise to 81.59 against the US Dollar in early trade.
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