The Reserve Bank of India (RBI) kept the repo rate steady at 6.5 percent for the seventh time in a row. This means that your home loan interest burden and equated monthly installments (EMI) will remain unchanged for now.
Announcing the decision, RBI governor Shaktikanta Das said, “The Monetary Policy Committee has decided to keep policy rate unchanged at 6.5%. The central banking authority of India has kept the repo rate unchanged for the last six consecutive MPC meetings. The decision was made with a majority of 5:1.”
How long will the home loan interest burden remain the same?
Borrowers will have to put up with with higher interest rates for some more months as when inflation cools to levels within the RBI’s comfort zone, rates could be reduced. RBI governor said that inflation continues to remain above the 4 percent target.
What RBI governor said on inflation?
He said, “Growth has continued to sustain its momentum, surpassing all projections. Headline inflation has eased to 5.1% during both January and February, and this has come down to 5.1% in these two months from the earlier peak of 5.7% in the month of December. Looking ahead, robust growth prospects provide the policy space to remain focused on inflation and ensure its descent to the target of 4%.”
Have banks increased home loan rates?
HDFC bank has increased home loan rates by 35 basis points (bps) for new borrowers despite repo rates being steady. Axis Bank and Karur Vysya Bank have also raised their effective new home loan rates by 5 bps.
