RBI Politics: Will Home and Auto Loans Rise Again? Know how much the Reserve Bank will raise interest rates this month

Photo: FILE RBI Policy

RBI Policy:If you forgot after reading the inflation numbers for August, then look at them again. Because this August inflation has prepared an increase in your EMIs for home and auto loans. Due to the high inflation rate in August, it is believed that the inflation rate will also remain high in September. In such a situation, analysts estimate that the Reserve Bank of India could increase the key rates (repo rate) by another 0.35% this month. This time, the Reserve Bank will announce interest rates on September 30.

Stopping inflation will increase inflation?

In fact, the retail inflation rate rose to 7% in August. A month ago, inflation based on the consumer price index (CPI) stood at 6.71% in July and 5.3% in August last year. Inflation based on the consumer price index remained above the central bank’s satisfactory level for the eighth consecutive month.

Interest rates have increased 3 times

To control inflation, the RBI raised the key interest rate three times to 5.40% this year. Despite this, inflation remains above 6%. The wholesale inflation rate has been in double digits for the past 17 months. At the same time, retail price inflation has also exceeded the Reserve Bank’s tolerable limit over the past 8 months.

Here is the estimate from UBS Securities

Tanvi Gupta Jain, chief economist for India at Swiss brokerage UBS Securities, said inflation in September is expected to remain at August’s level. However, it may decrease from October. In such a situation, the RBI Monetary Policy Committee may take the decision to increase the repo rate by 0.35% during the September 30 policy review.

Barclays expects 0.50% growth

Rahul Bajoria, chief economist at Barclays Securities India, said wholesale and retail inflation remained elevated and the RBI’s monetary policy committee was expected to look into changing price trends. He said the committee could increase rates until September 30 and that increase could be 0.50%.

Morgan Stanley’s Guess

Morgan Stanley said WPI-based inflation is also expected to be around 5.3% in FY 2023-24 and RBI may raise repo rates by 0.35% in the next monetary policy review.

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