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Interest rates will decrease, loans will become cheaper! – Bollywood Keeda

Delhi. Commerce and Industry Minister Piyush Goyal expressed confidence that the Reserve Bank of India (RBI) will cut the policy rate as inflation comes under control. The policy rate repo remains at a high level of 6.5% since February 2023.

RBI uses repo rate to control inflation. Goyal said that the economic foundation of the country is strong and inflation is under control. He said that the 10 year average inflation rate in India has been around 5 to 5.5%. This was the best performing decade and because of this, interest rates dropped significantly and the central bank became stronger and now has the ability to bring down interest rates. He said, “Of course in the last one and a half year, after the Ukraine-crisis, the interest rate has increased again by 2.50%. But now that inflation is largely under control, I am hopeful that the interest rate situation will turn around and will come down soon. Even if this reduction in interest rate happens in the next monetary policy review or in the second monetary policy review after that. If the Reserve Bank cuts the repo rate, the cost of borrowing for both companies and individuals will reduce and consequently the EMI (monthly installment of the loan) will be lower.

Repo rate is stable at 6.5%

On February 8, the central bank had maintained the policy rate repo at 6.5% for the sixth consecutive time. The next monetary policy review of RBI will be on 5 April. Consumer Price Index based inflation was at 5.1% in January this year, which was at the level of 6.52% in the same month a year ago. Inflation based on Wholesale Price Index stood at a three-month low of 0.27% in January. The wholesale inflation rate has come down mainly due to the fall in the prices of food items. Addressing 35 journalists from 19 Latin and Caribbean countries, Goyal also said that the government aims to create an economy of $30,000 billion to $35,000 billion by 2047 from the current $3,700 billion.

Rishabh Garg

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Rishabh Garg

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