The Governor of the Reserve Bank said that due to the reduction in loan rates, the burden on the common people has reduced. “Household borrowing costs have come down, including interest rates on market instruments like corporate bonds, debentures, CPs, CDs and T-bills.
RBI Governor Shaktikanta Das on Home Loan
Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said a significant reduction in lending rates in the individual housing and commercial real estate sector augurs well for the economy, as the sector provides a large number of jobs. Announcing the bi-monthly monetary policy review, he said that the transmission of interest rates has improved, that is, the borrowers are getting the benefit of it further.
“The impact of RBI’s monetary policy measures and actions is reflecting in the form of significant improvement in transmission,” Das said. There has been an overall decline in the weighted average lending rate (WALR) on fresh rupee loans by 2.17 per cent due to reduction in repo rate by 2.5 per cent since February, 2019.
Reduction in interest rates reduced the burden on the common people
The governor also said that the reduction in loan rates has reduced the burden on the common people. “The domestic borrowing cost, including interest rates on market instruments such as corporate bonds, debentures, CPs, CDs and T-bills, has come down,” he said. The transmission in lending rates has been strong. The low interest rate regime has also helped in reducing the debt burden for the domestic sector. He said that a significant reduction in interest rates on personal housing loans and loans to the commercial real estate sector is a good sign for the economy, as these sectors provide a large number of jobs.
Interest rates stable for the seventh time
Earlier on Friday morning, Reserve Bank of India Governor Shaktikanta Das announced the monetary policy. Governor Das informed about the decision taken in the three-day meeting of the Monetary Policy Committee. For the seventh time in a row, the repo rate and reverse repo rate have been retained. The repo rate has been kept at 4 percent and the reverse repo rate at 3.35 percent. Governor Das said that the economy is recovering from the second wave of Corona. The balance of supply and demand has deteriorated, which is gradually being corrected. He said that the economic recovery in July was better than in June. Along with this, he also said that there is a need to be alert towards the third wave of Corona. The Reserve Bank of India has retained the GDP growth rate forecast for the financial year 2021-22 at 9.5 per cent.
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