In a major decision, the Reserve Bank of India (RBI) on Wednesday announced that the key repo rate will be raised by 40 basis points (0.4%). This step was taken by RBI in a bid to curb inflation. The hike is widely expected to push up loan rates for all types of loans in India and it will make your EMI costlier. The RBI’s action comes on the back of rising inflation in the country and has impacted the financial condition of the borrowers.
Over the last few months, Indian banks have been objecting to the rising interest rates in the country, and there was a possibility of revising the bank lending rates. A more stringent environment could make all loans expensive and thus has the potential to slow down the economy.
RBI Governor Shaktikanta Das has said that the inflation rate in March was higher than expected and the same is expected to increase in April as well.