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RBI Hikes Repo Rate: The Reserve Bank of India on Wednesday hiked the repo rate by 25 basis points to 6.5%, Governor Shaktikanta Das announced the decision of the monetary policy committee which was passed by a majority of 4 members of 6 members. This was the first Monetary Policy Statement of the year. In December 2022, the repo rate was raised by 0.35 percentage points to 6.25%. There was no change in the reverse repo rate of 3.35%.
The real GDP growth for 2023-24 is projected at 6.4% with Q1 at 7.8%, Q2 at 6.2%, Q3 at 6% & Q4 at 5.8%.
Most analysts had expected a hike on Wednesday to be the final increase in the RBI’s current tightening cycle, which has seen it raise rates by 250 bps since May last year.
The monetary policy committee (MPC), comprising three members from the central bank and three external members, raised the key lending rate or the repo rate to 6.50% in a split decision.
Four of the six members voted in favour of the decision.
Let’s understand how the rate hike will impact your EMIs:
HOME LOAN
If you have borrowed a home loan of Rs 25 lakh at 7.05% per annum for a tenure of 20 years and the interest is hiked to 7.55%, your EMI will go up approximately by Rs 758 from Rs 19,458 to Rs 20,216. The total interest amount payable would be Rs 23,51,918 against Rs 21,69,819. For Rs 50 lakh, the EMI will increase by Rs 1,518 from Rs 38,915 to Rs 40,433 and the total interest payable would be Rs 47,03,840.
CAR & BIKE LOAN
Likewise, if the interest rate is increased from 9% to 10% on an auto loan of Rs 7.50 lakh with a tenure of 7 years, the EMI will become costlier by Rs 400.
PERSONAL LOAN
Similarly, for a person who borrowed a personal loan of Rs 5 lakh at 13% per annum for a tenure of 5 years, the EMI, in case the interest rate is increased to 15%, would go up by Rs 518 from Rs 11,377 to Rs 11,895.
