3:46 pm - Thursday March 28, 2024

Home, auto loan EMIs to remain intact as RBI retains interest rates

615 Viewed Gautam Comments Off on Home, auto loan EMIs to remain intact as RBI retains interest rates

MUMBAI: Equated monthly installments (EMIs) paid on home, automobile and other loans would remain unchanged, as the Reserve Bank of India (RBI) left key interest rates unchanged in its third bi-monthly monetary policy review on Tuesday. 

The status quo in key policy rates would mean that the sectors like realty, automobile and other capital intensive industries will not get any relief from the high interest cost prevailing in the country to contain inflation. 

Several sectors — like automobiles — have been struggling to keep up sales due to high interest and fuel costs which has dampened consumer sentiments in Asia’s third largest economy.Governor Raghuram Rajan said in his policy statement that RBI will continue to closely monitor inflation developments, and remains committed to the disinflationary path of taking Consumer Price Index (CPI) inflation to 8 per cent by January 2015 and 6 per cent by January 2016. 

“While inflation at around 8 per cent in early 2015 seems likely, it is critical that the disinflationary process is sustained over the medium-term,” the governor said. 

The repo rate, or the interest that banks pay when they borrow money from the RBI to meet their short-term fund requirements, has been left unchanged at 8 per cent. 

The reverse repo rate, or the interest that the RBI pays to commercial banks when they park their surplus short-term funds with the central bank, has been adjusted to 7 per cent. 

The cash reserve ratio (CRR) is left unchanged at 4 per cent. The marginal standing facility rate and the bank rate is also kept unchanged at 9 per cent. 

The statutory liquidity ratio (SLR), the mandatory amount of bonds lenders must keep with the RBI, was cut by 50 bps to 22.0 per cent of their net demand and time liabilities (NDTL) with effect from August 9, 2014.The central bank’s action is on the expected lines as most analysts predicted a status quo, considering the macro-economic situation and current data. 

“There are upside risks in the form of the pass-through of administered price increases, continuing uncertainty over monsoon conditions and their impact on food production, possibly higher oil prices stemming from geo-political concerns and exchange rate movement, and strengthening growth in the face of continuing supply constraint,” the policy statement said. 

Data released earlier by the Central Statistics Office (CSO), showed that retail inflation based on consumer price index (CPI) declined to 7.31 per cent in June from 8.28 per cent in the previous month. 

The central and state governments are taking steps to contain the rising food prices by either directly selling edible commodities or easing grain imports. 

The price of tomatoes has sky-rocketed in certain areas to nearly Rs 80-100 a kg. 

Don't miss the stories followIndiaVision India News & Information and let's be smart!
Loading...
0/5 - 0
You need login to vote.
Filed in

Ratan Tata visits Jayem Automotives

Infosys co-founder plans angel fund for tech start-ups

Related posts