RBI Repo Rate Increase – Once again, inflation has hit the general public. The monetary policy meeting, which has been taking place for two days, has made the decision today to raise the repo rate again. RBI Governor Shaktikanta Das announced that RBI has increased the repo rate by 25 basis points to 6.5%. We inform, in all the 5 meetings held before this one, the rate was increased. The government has entrusted the RBI with the responsibility of keeping inflation at the six percent level (two percent up or down). Inflation has been above 6% for three consecutive quarters since January 2022. There was some relief in November and December 2022.
The buyback rate has increased 5 times in 2022
- May – 0.4%
- June 8 -0.5%
- August 5 – 0.5%
- September 30 – 0.5%
- December 7 – 0.35%
The reason for increasing the repo rate is to control inflation.
Due to the rising inflation in the country, many times people do not even have money to buy essential things. The Reserve Bank (RBI) tries to control this inflation by increasing the repo rate. Great care is also taken to ensure that there is no burden on the public. Generally, increments of 0.50 or less are made. During the Kovid time, it had increased by at most 4 percent. Because of this, interest rates on home, car, and personal loans also increase.
This increases the burden on the public due to the increase in the repo rate
Due to the increase in the repo rate, borrowers find it difficult to pay the IME. This actually increases interest rates. Keeping people in mind, the RBI works to increase the rates of which. The concession is also given to those who are unable to pay EMI for any reason. Due to the lockdown at the time of Kovid, many people were granted the concession to pay EMI due to lack of income.
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