The report also predicted a rise in inflation. It said retail inflation is expected to average 6.8% in FY 2022-23, well above the RBI’s target of 2-6 percent. If the inflation rate remains high, the RBI may take the interest rates to 5.65% in the current financial year.
Inflation is at its peak in the country. The government is making many efforts to bring it down to its level. Meanwhile, the meeting of the Monetary Policy Committee of the Reserve Bank of India is also to be held next week. In such a situation, experts believe that the RBI may once again increase the policy interest rates. The effect of this will be that the EMI of the loan can once again become expensive.
The Repo rate may increase by 0.40%
The meeting of the Monetary Policy Committee is to be held from June 6 to 9. In the last meeting held in April, the MPC did not make any changes in the repo rate and reverse repo rate, but in early May, the RBI called an emergency meeting of the MPC and increased the interest rates by 0.40%. PTI quoted brokerage agency BofA Securities as saying that this time also the RBI can increase the repo rate by 0.40%.
Tomato increased inflation
BofA Securities says that inflation has increased again in May due to tomato prices. The core inflation rate has reached 7.1%. In such a situation, the increase in the interest rate of RBI is almost certain. However, the government has taken several measures to cut taxes on petrol and diesel, make imports of crude soybean and sunflower oil duty-free, and bring down the price of aviation fuel (ATF).
Debt will be more expensive in future
The news has reported that in the coming months, the RBI may once again increase the interest rates to 0.50% from 0.35% in August. If the repo rate continues to increase in the same way, then in the coming days, the burden of EMI of loans on the common man is likely to increase further. The report also predicted a rise in inflation. It said retail inflation is expected to average 6.8% in FY 2022-23, well above the RBI’s target of 2-6 percent. If the inflation rate remains high, the RBI may take the interest rates to 5.65% in the current financial year. At present, the repo rate is 4.40%.