RBI got worried after seeing the inflation figures, will your EMI not be reduced this time also? - Newztezz Online

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Wednesday, May 15, 2024

RBI got worried after seeing the inflation figures, will your EMI not be reduced this time also?

The monetary policy of the Reserve Bank of India (RBI) will come right after the elections, but this time also the central bank can keep the interest rates stable, because inflation has come down but is still more than the range of 4 percent. Know what is RBI's concern...?

Inflation has come down continuously in the last few months, but it is still higher than the 4 percent limit of RBI. In such a situation, when the monetary policy of RBI comes next month, will the EMI of the common man be reduced? The monetary policy of the Reserve Bank of India is to be announced just after the results of the ongoing Lok Sabha elections in the country, in such a situation it also has to be seen whether its policy will also be affected by the new government?

According to the data of the Ministry of Statistics, the retail inflation rate in April was 4.83 percent. Whereas in March it was 4.85 percent. That means there has not been much change in the inflation situation. The biggest problem is the increase in prices of food items. The Reserve Bank of India decides its monetary policy on the basis of retail inflation.

Will your EMI be reduced?

In view of the inflation situation, the Reserve Bank of India has kept the repo rate (policy interest rate) at 6.5 percent for more than a year. RBI is trying to bring the inflation rate within the range of 4 percent. However, it has come below its upper limit of 6 percent. In such a situation, experts believe that RBI can take a decision on this also i.e. in the Monetary Policy Committee meeting in June to keep the interest rates unchanged. Not only this, economic experts believe that the current interventionist stance of RBI will also become neutral only after the monetary policy of August.

RBI's repo rate actually has a direct impact on the loan EMI of the common man. If RBI reduces the repo rate, then the capital cost of banks reduces. Because of this, they reduce the interest rate on the loan and because of that the EMI of the people gets reduced. Anyway, the guidelines of RBI are that banks have to keep the loan interest rate as per some external standard, so banks also make the repo rate its basis. If RBI does not reduce the interest rate, your EMI will not be reduced.

Impact of world and country elections

Currently, Lok Sabha elections are going on in the country. Its decision is to come on June 4. In such a situation, the formation of the new government and the impact of its policies will start becoming visible to the people by August. Therefore, there is less scope for major changes in the monetary policy this time. Not only this, world events also impact the country's economy. Recently, America's Joe Biden government has imposed import duty of up to 100 percent on Chinese goods, due to which there is a possibility of a trade war breaking out between the two countries once again.

At the same time, the policy of the Federal Reserve of America is also to be released in June, which can change the investment pattern and movement of the dollar in the whole world. Its effect can also be seen on the monetary policy of RBI.

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