The Reserve Bank of India (RBI) on Thursday announced that they have decided to keep the repo rate unchanged on April 6, 2023, keeping it steady at 6.5 percent. RBI Governor Shaktikanta Das announced the same today, saying that the repo rate will be changed if the situation of the economy changes in the future.
After a two-day meeting for the monetary policy, five out of six members of MPC voted to remain focused on the withdrawal of accommodation to ensure inflation aligns with the target while focusing on growth, RBI Governor Shaktikanta Das said on Thursday. The Monetary Policy Committee of the central bank decided to take a pause after a rate hike seen in the previous six consecutive policies.
This means that the standing deposit facility (SDF) will remain unchanged at 6.25 percent, and the marginal standing facility (MSF) and bank rates unchanged at 6.75 percent. This means that there will be no change in the EMI home loan rates since the RBI repo rates remain unchanged.
Core inflation - non-food, non-fuel component - continued to remain above the 6 percent mark for the fourth consecutive month, prompting expectations of another rate hike of 25 basis points by the RBI in its upcoming policy review in April.
Impact of RBI repo rates on home loan EMI
If the RBI repo rate is raised or decreased, it will have a direct impact on the home loan EMI. If the RBI repo rate is increased by the Reserve Bank of India, then the interest rate on home loans will also be hiked, owing to the inflation in the country.
The repo rate is directly linked to the home loan offered by banks and lenders. This means that an increase in the repo will increase the borrowing cost and vice-versa. Since the RBI repo rate remains unchanged, this means that there will be no impact on the home loan EMI this time.
(With inputs from ANI)
READ | RBI likely to announce another repo rate hike today to manage inflation
