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No respite to home, auto loan borrowers; RBI keeps interest rate unchanged

The EMIs on home and auto loans are unlikely to come down in the near term as the Reserve Bank on Tuesday kept the Repo rate unchanged at 6.75% in the sixth bi-monthly policy announced on Tuesday.


No respite to home, auto loan borrowers; RBI keeps interest rate unchanged

Zee Media Bureau

New Delhi: The EMIs on home and auto loans are unlikely to come down in the near term as the Reserve Bank on Tuesday kept the Repo rate unchanged at 6.75%.

The RBI has also kept the Cash Reserve Ratio( CRR) unchanged at 4%. The Reverse Repo Rate also remained the same at 5.75%. 

 

RBI sees FY16 growth at 7.4 percent with a downward bias and FY17 growth at 7.6 percent despite headwinds. 

The Reserve Bank will adjust the forecast path as and when more clarity emerges on the timing of implementation. Vagaries in the spatial and temporal distribution of the monsoon and the impact of adverse geo-political events on commodity, RBI said. in its sixth bi-monthly policy statement.

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With  unfavourable  base  effects  on  the  ebb  and  benign  prices  of  fruits  and  vegetables and crude oil, the January 2016 target of 6 percent should be met, the RBI said.

Under the  assumption  of  a  normal  monsoon  and  the  current  level  of  international  crude  oil  prices  and  exchange  rates,  inflation  is  expected  to  be  inertial and  be  around  5  percent  by  the  end  of  fiscal  2016, it added.

The RBI is most likely to achieve its January 2016 target of having inflation under the 6 percent mark, but is committed to getting the headline number down to 4 percent in two years from now.

In the last calender year, RBI reduced key policy rates by 1.25 percentage points. Both WPI and retail inflation have been on a rising trend.

In December, WPI-based inflation stood at (-)0.73 percent, while retail inflation moved up to 5.61 percent.

However, the implementation of the 7th Central Pay Commission award, which has not been factored into these projections, will impart upward momentum to this trajectory for a period of one to two years. The RBI will also create a special ecosystem for startup funding. 

 

 

From Zee News

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