- Loan takers will get a big blow!
- Repo rate will increase due to inflation
- How much strain will it put on your pocket?
RBI Repo Rate Hike: The effect of inflation will now be seen not only on the pockets of common people, but also on their loan repayments. The Reserve Bank of India (RBI) is likely to take a major decision on interest rates at its Monetary Policy Committee (MPC) meeting in December. Due to this decision, the burden on the common man's pocket will increase a lot. (RBI Repo Rate Hike)
ICICI credit card holders blow! Free facilities closed from December 15, the burden on the pocket will increase
According to a report by SBI Research, the central bank had recently hiked repo rates. Now again RBI is likely to increase the repo rate by 0.25 percent, i.e. by 25 basis points. But the report also states that the possibility of a sudden big increase i.e. 0.50 per cent at once is unlikely.
Marginal inflation raises RBI's concerns
According to data released by the government, retail inflation rose to 6.09 percent. This is the first time that inflation has crossed the RBI's target of 2 to 6 percent since the release of the new data. According to the report, inflation is likely to remain above 6 percent next month. But, after that, it is also expected to decrease. So we have to see how exactly this ups and downs have an effect.
Rate from 5.50 percent to 5.75 percent
According to SBI Research, the repo rate may go up to 5.75 percent from the current 5.50 percent in the December meeting. The report said that while there are signs of relief from some pressures related to inflation, the position of the rupee and international markets, a modest hike in interest rates remains likely given the economic environment.
Chances of further hike in February are slim
According to SBI Research, the chances of multiple rate hikes in a row are now receding. According to reports, the final repo rate may be around 6 percent, and it is likely to stabilize at 5.75 percent.
Instead of raising rates again in February, the central bank could make a decision based on economic data. Consequently, the MPC meeting in December will be crucial for the public, creditors and investors. But, the final decision on changes in repo rate will be taken by RBI.
Relief from foreign investment and crude oil
The report also highlights some positive signs for India. An improving environment for artificial intelligence i.e. AI sector could increase the attractiveness of the Indian market. This is likely to increase the investment of Foreign Institutional Investors (FIIs).
According to the report, FII investment has reached approximately $7.65 billion since November 6. Additionally, crude oil prices may be relieved by expectations of easing tensions between the US and Iran. Oil prices have fallen roughly 11 percent since the US elections. It is estimated that its average price will remain around 87 dollars per barrel.
Gokul Milk Price Hike: After Amul-Mother Dairy, Gokul milk will also become expensive; Will the price increase by Rs. 2?