Lending rate up by 25 bps; home, auto loans set to rise : The Tribune India

Lending rate up by 25 bps; home, auto loans set to rise

Lending rate up by 25 bps; home, auto loans set to rise

Shaktikanta Das, RBI Governor



Tribune News Service

New Delhi, February 8

The Reserve Bank of India (RBI) has increased the repo rate by 25 basis points to 6.5 per cent and forecast slower economic growth of 6.4 per cent during the next fiscal as compared to the estimation of 7 per cent during the current financial year.

Repo rate is the interest rate at which the central bank lends to banks. The move to raise the rate will make loans, including housing and auto, and corporate credit expensive.

SENSEX JUMPS 377.75 POINTS

24 CONSTITUENTS POST GAINS

CLOSES AT 60,663.79

  • The NSE Nifty spurts by 150.20 points to settle at 17,871.70
  • Among Sensex stocks, Bajaj Finance rises the most by 3.14%
  • It was followed by Ultratech, RIL, Infosys, Wipro, HCL Tech, TCS, Bajaj Finserve

Growth forecast

6.4% RBI’s growth forecast next fiscal

The Union Budget pegs the actual growth rate for 2023-24 at a marginally higher 6.5 per cent, while the Economic Survey estimates the real growth rate to be between 6 and 6.8 per cent.

Announcing the bimonthly monetary policy in Mumbai on Wednesday, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) decided on a sixth successive increase in the repo rate by a split decision of four to two. Faced with finding a balance between raising interest rates to check inflation and not affecting industry’s growth, Das justified the hike on the basis of RBI’s internal surveys which said manufacturing, services and infrastructure sector firms were optimistic of the business outlook. “Emerging market economies are facing sharp trade-offs between supporting economic activity and controlling inflation while preserving policy credibility,” said Das in this respect. The repo rate at 6.5% still trails the pre-pandemic level and core inflation (manufacturing) remains sticky, he added.

Growth during 2023-24 would, however, be weighed down by geo-political tensions and tightening global financial condition, Das cautioned.

The MPC resolved to keep a close watch on inflation, which would remain above the comfort band of 6% during the current fiscal, but moderate to 5.3% during the next fiscal.

Quarterly inflation rates will decline to 5.7% during the ongoing fourth quarter of 2022-23 and further reduce to 5%, 5.4%, 5.4% and 5.6% during the four quarters of 2023-24. Quarterly GDP growth rates are projected at 7.8%, 6.2%, 6% and 5.8% during the four quarters of 2023-24.

After the repo rate hike, the standing deposit facility (SDF) rate has been adjusted to 6.25%, and the marginal standing facility (MSF) rate and the bank rate to 6.75 per cent. Das said it was now proposed to permit all inbound travellers to use UPI payments for their merchant payments while they are in India. To begin with, this facility will be extended to travellers from G20 countries arriving at select international airports.

Projections for next fiscal

Quarterly inflation rates estimated at 5%, 5.4%, 5.4% and 5.6% during the four quarters of the 2023-24 fiscal

Quarterly GDP growth rates are projected at 7.8%, 6.2%, 6% and 5.8% during the four quarters of 2023-24

Tribune Shorts


Top News

The ordinance Rahul Gandhi trashed could have saved him

The ordinance Rahul Gandhi trashed could have saved him

Congress leader has been trapped in the consequences of the ...

Centre hikes DA by 4 per cent for govt employees

Centre hikes DA by 4 per cent for central govt employees

About 47.58 lakh government employees and 69.76 lakh pension...

2019 defamation case: Congress leader Rahul Gandhi disqualified from Lok Sabha

Rahul Gandhi disqualified as Lok Sabha MP; Congress vows to fight legally, politically

LS secretariat has sent notification to EC to declare Wayana...

Congress plans mass agitation, to meet President Murmu to discuss Rahul Gandhi's conviction

Opposition holds protest march alleging 'democracy in danger'; seeks JPC probe into Adani issue

Prominent leaders stopped by police and detained at Vijay Ch...


Cities

View All