In line with the market expectations, RBI has hiked the Repo Rate and the Reverse Repo Rate by 25 basis points each after Quarterly Review of Monetary Policy, and has also revised upward inflation target to 8% from earlier year-end expectation of 7%.
Food inflation may not come down in a hurry. Global oil & commodity prices, which have remained high for some time. With high inflation, real interest rates have remained negative and we expect that RBI would continue to hike rates as least by 50 bps more in the coming months in a phased manner.
What does it mean to you
Home, car and personal loans are likely to rise marginally with the Reserve Bank of India, under pressure to combat rising inflation.
Both lending and deposit rates are likely to go up, although by how much cannot immediately be said. The increase in interest rates. In short, Higher EMI's for your loans with floating interest rates.
