The next policy review of the Reserve Bank is in the beginning of December and experts believe that in this review also the bank will increase the rates. That is, the period of costlier loans may continue in the coming times.
RBI may increase rates in December as well
Due to fears of recession in the world’s economies, domestic economy But the pressure is being seen. global Looking at the signs, institutions around the world are revising growth estimates. The reason for this is the increase in rates by the central banks. Whose pressure is visible on the growth of the world and due to this there is pressure on the Indian economy as well. At present, the Reserve Bank has made it clear that controlling inflation is the biggest concern for it, that is why it is increasing the rates despite the fear of recession. There is a policy review meeting of the Reserve Bank next month. If indications are to be believed then forget the talk of relief in the rates in the next policy review, there is a high possibility of further increase in the rates.
What is the forecast for rate hike?
Moody’s estimates that the Reserve Bank may further increase the repo rate by around 0.50 percent to control inflation and support the exchange rate. At the same time, Goldman Sachs estimates that the Reserve Bank will continue to increase its rates. The brokerage said that the Reserve Bank of India (RBI) may increase the repo rate by 0.50 points in the December monetary policy review meeting and 0.35 percent in the February 2023 meeting. With this, the repo rate will reach 6.75 percent by February next year. It is clear that your EMI may increase further in the coming times.
Why interest rates will rise
In fact, there is a possibility of impact on growth due to higher interest rate. However, even after the recent rate hike, India’s growth is expected to remain the highest among the major economies of the world. For this reason, the Reserve Bank is putting its full emphasis on bringing the inflation rate below 6 percent. Only last month, RBI’s Monetary Policy Committee (MPC) member Ashima Goyal had said that frequent interest rate hikes would help in containing inflation, adding that the hike in policy rates has reversed the trend of reduction during the pandemic. has changed, but the real interest rate is still so low that it will not harm the recovery in growth.
He meant that the rates were cut during the pandemic, but now the rates are increasing so the actual increase is not much based on the data of recent years. However, he admitted that after two-three quarters the real rates would reach a higher level and this would affect the demand. However, by then inflation will come under control and the cost pressure on the industry will come down.
