RBI Monetary Policy Meeting: Will Home Loan EMI Reduce? What We Know
RBI has not changed the 6.5% repo rate since February 2023.
Post the meeting, RBI Governor Shaktikanta Das will give information about the decision on the repo rate on Wednesday (October 9).
The Reserve Bank of India (RBI) started its three-day monetary policy meeting today (October 7) and will last till October 9. This meeting comprises the RBI’s rate-setting committee of three newly appointed external members. Post the meeting, RBI Governor Shaktikanta Das will give information about the decision on the repo rate on Wednesday (October 9).
In this case, the question that arises is whether the home loan EMI (Equated Monthly Installments) will be reduced or not. As per the experts, there is no possibility of a decrease in the key interest repo rate in the MPC meeting of RBI. This implies that the loan EMI will neither increase nor decrease. Experts point out that retail inflation remains a matter of concern and the West Asia crisis is likely to worsen. This will impact crude oil and commodity prices. The Repo Rate is the interest rate at which the Reserve Bank of India (RBI) loans money to commercial banks.
The Reserve Bank of India has kept the repo rate unchanged at 6.5 per cent since February 2023. According to experts, there can be a scope for some relaxation in this repo rate from December. The government has entrusted the RBI with the task of ensuring that retail inflation based on the Consumer Price Index (CPI) remains at 4 per cent (up or down 2 per cent). The change in the price index over some time is called retail inflation. The Consumer Price Index measures change over time in the prices paid by consumers for a representative basket of goods and services.
Experts believe that the RBI will probably not follow the US Federal Reserve, the most powerful economic institution in the United States. This has reduced the benchmark rates by 0.5 per cent. RBI will also not follow the central banks of some other developed countries, which have reduced interest rates.
Madan Sabnavis, Chief Economist, Bank of Baroda expressed his opinion with the Press Trust of India. As per the Chief Economist, “We do not expect any change in the repo rate or stance by MPC. The reason is that inflation for September and October will be above 5 per cent, and the present low inflation is due to the base effect. Besides, core inflation is inching upwards.”
