Will your MI decrease this time too during the Corona period? RBI will take a decision on June 4

Today is the second day of RBI’s Monetary Policy Committee meeting. The question is whether the central bank will keep the status quo in the matter of interest rates this time too or will it cut it. Despite the fall in industrial activity due to the second wave of COVID-19, the RBI is not expected to cut interest rates. Therefore, there is no scope for relief on the EMI front. In fact, to keep inflation under control, RBI will hesitate to cut interest rates. The monetary policy review will be announced on Friday.

RBI will not reduce interest rates for the time being

In April, after the RBI announced the policy review, the repo rate was retained at 4 per cent. There was no change in the current reverse rate at 3.5 per cent. According to M Govind Rao, Chief Economic Adviser, Brickwork Ratings, the better performance than the GDP estimates has given relief to the Monetary Policy Committee. However, the lockdown and corona restrictions in the states of the country have raised concerns on the growth recovery front. But due to rising commodity prices and increasing input costs, the pressure of inflation is deepening. Therefore, RBI is cautious and will not take steps to make interest rates cheaper. Due to this, the loan customer will not get relief from the heavy EMI burden during the Corona period. Shanti Ekambaram, Group President, Consumer Banking, Kotak Mahindra Bank, says that in the current environment, the options before the Monetary Policy Committee are limited.

Understand the calculation of interest on recurring deposits, financial planning will be easy

Inflation control top priority for RBI

The Reserve Bank’s Monetary Policy Committee looks at retail inflation while setting interest rates, which had come down to 4.29 per cent in April. But RBI also has to maintain liquidity in the market. At present, RBI is in a good position in this matter. In the case of home loans, the interest rates are cheap right now. Therefore, for home loan customers, there does not appear to be any scope for reducing the EMI. Despite the decrease in demand, banks do not seem to be in a mood to reduce the rates of consumer loans, auto loans as well.