Kerala News Journal
Buisness

When will you get relief from increased EMI on Home-Car loan? RBI Governor Shaktikanta Das gave information

There is good news for lakhs of people waiting to get relief from increased EMI on home and car loans. RBI Governor Shaktikanta Das has given important information regarding the reduction in interest rates. He said that retail inflation has come down due to the steps taken by the central bank and efforts are on to bring it down further to 4 percent. He said that interest rate and inflation go hand in hand. Therefore, if inflation is brought under control at a sustainable level, the interest rate can also come down. Asked whether interest rates will come down once inflation comes down, Das said, “I won’t say anything about that now.” When the inflation is low, then we will think about it. Experts say that RBI can give the gift of a rate cut to the people during the festive season.

Inflation increased due to the Russia-Ukraine war

Talking at the RBI headquarters here, Das said, Inflation had increased significantly after February-March last year due to the Ukraine war. Due to this, the prices of commodities increased at the international level. Many food items such as wheat and edible oil come from Ukraine and the Central Asia region. The disruption in the supply chain from that region pushed up prices significantly. But soon after that, we took several steps. We started increasing the interest rate from May last year. Several steps were taken to improve the supply system at the government level as well. Inflation has come down due to these measures and it is now below five percent. It is notable that the inflation rate based on the Consumer Price Index stood at a 25-month low of 4.25 percent in the month of May. It had gone up to 7.8 percent in April last year.

RBI has increased the repo rate by 2.5%

To bring inflation under control, the Reserve Bank has increased the repo rate by 2.5 percent from May last year to February this year. When asked by when people would get relief from inflation, Das said, Inflation has come down. It was 7.8 percent in April last year and now it has come down to 4.25 percent. We are keeping a close watch on this. We will take whatever step is necessary. In this financial year, we estimate that it will be an average of 5.1 percent and next year (2024-25) our efforts will continue to bring it to the level of four percent. The responsibility of keeping the percentage has been given. The central bank primarily takes into account retail inflation while deciding on the policy rate-repo. When asked about inflation at the level of food items, he said, “The prices of food items have also come down. FCI has been releasing wheat and rice in the open market. In many cases, the level of customs duty has been adjusted. At the monetary policy level, we have taken a calculated stance on the policy rate. There has been a lot of improvement in food inflation in the last figure. Food inflation stood at 2.91 percent in May as compared to 3.84 percent in April. However, inflation in cereals and pulses shot up to 12.65 percent and 6.56 percent, respectively.

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