RBI hikes repo rate: The Reserve Bank of India (RBI) on Friday increased the repo rate by 50 basis points to 5.40 per cent as the new rates jumped back to pre-pandemic level, the highest since August 2019.
The RBI’s Monetary Policy Committee (MPC), headed by Governor Shaktikanta Das, announced the repo rate hike to tame inflation. In last two policies, the central bank has hiked the rate by a cumulative of 90 basis points in May and June, due to high inflation, which was breaching RBI’s upper tolerance band for the consecutive months.
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RBI increases repo rate by 50 BPS to 5.4%: What it means
- The Reserve Bank of India’s (RBI) rate-setting committee hiked 50 basis points in repo rate in the monetary policy meeting held on Friday.
- All home, auto and personal loans are set to become costlier as the RBI increased the repo rate in the third consecutive policy rate hike to check elevated retail inflation.
- RBI’s repo rate hike will have a direct impact on loan borrowers since banks and Non-Banking Financial Companies (NBFCs) are anticipated to raise lending rates.
- Borrowers would have to pay higher EMIs as banks and housing finance companies may raise their lending rates in response, resulting in an addition in your EMIs.
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