Will interest rates on personal loan, home loan and car loan reduce? – ..
December 4, 2024
Business
37 minutes ago Business
RBI MPC Meeting: People in India have been waiting for a long time for the reduction in interest rates on all types of loans including personal loan, home loan and auto loan. This will happen when the Reserve Bank of India i.e. RBI starts cutting its main interest rate repo rate. Repo rate is the rate at which RBI lends to banks and financial institutions. When banks get cheap loans, they also give cheap loans to their customers. The repo rate is decided in the Monetary Policy Committee meeting of RBI. This meeting takes place every 2 months. RBI MPC meeting has started today from Wednesday. On December 6, the RBI Governor will give information about the decision of this meeting.
Will interest rates fall?
The central bank decides on the repo rate keeping in mind the inflation data and economic growth rate. The repo rate is expected to remain unchanged as retail inflation remains above RBI’s satisfactory level. RBI Governor Shaktikanta Das is chairing the last MPC meeting of his current tenure. His tenure ends on December 10. The government has given the responsibility to RBI to keep the retail inflation rate at four percent with a variation of two percent.
No change from February 2023
RBI has kept the repo i.e. short-term interest rate at 6.5 percent from February 2023. Experts believe that some relaxation may be available only in 2025. “We do not expect a rate cut in the current financial year,” an SBI research report said. The first rate cut and further changes in stance are expected in April 2025. India’s GDP growth rate fell to a two-year low of 5.4 per cent in the July-September quarter of the current financial year due to weak performance in the manufacturing and mining sectors. Gaya GDP grew by 8.1 percent in the July-September quarter of the financial year 2023-24. “RBI should reduce CRR (cash reserve ratio) in a phased manner to support growth by increasing liquidity instead of cutting rates,” said Mandar Pitale, head of treasury, SBM Bank India.
