New Delhi: The Reserve Bank of India is ready to raise interest rates once again. To control inflation, RBI has increased the repo rate by 1.40 percent since May. Due to this the repo rate has increased from 4 per cent to 5.40 per cent. The central bank can take a decision to increase the repo rate by 0.50 percent on 30 September and if this repo rate is increased, then let us know what will be its effect on the general public.
RBI’s Monetary Policy Committee meeting from September 28-30 is likely that the Reserve Bank will announce the change in the repo rate on the last day of the meeting. The Reserve Bank uses the repo rate to control the flow of money in the market. An increase in the repo rate means that the money will be made available to the banks borrowing from the RBI at higher interest rates. This repo rate means that the money will be made available to those banks which borrow money from RBI at an increased rate of interest. After this decision of the central bank, banks will also increase interest rates on loans. In such a situation, if banks take a loan from RBI at an expensive rate, then they will also give loan to the common man at an expensive rate. With the increase in the repo rate, all loans will become expensive. Which will have a direct impact on the EMI of the loan taken by the common man.
How FD investors benefit
There is good news for those who save through fixed deposits. This decision of RBI will benefit such customers who have savings and FDs. Banks will not decide to cut interest rates on FDs due to the increase in the policy rate. Half a percentage point in the repo rate.
The Reserve Bank of India has announced the decision to increase the key interest rate i.e. repo rate by 0.50 percent. Therefore, the repo rate has now increased to 5.40 percent. So the repo rate reached 4.90 percent. Apart from this, recently the US Central Bank Federal Reserve (US Fed) also increased interest rates. It was expected that RBI would also decide to hike interest rates.
