RBI rate hike likely: what it means for your loans and savings
Mumbai, October 6: The Reserve Bank of India is widely expected to raise its key lending rate on Wednesday. Here is what that means for you.
The repo rate is the rate at which the RBI lends to banks. It now stands at 5.25 per cent. Most economists expect a 25-basis-point rise to 5.50 per cent, the first hike since February 2023.
A higher repo rate makes borrowing costlier for banks. Banks usually pass this on, so home, car and personal loan EMIs can rise. New borrowers face higher rates first.
Savers may gain. Banks often raise fixed-deposit rates when the repo rate climbs, though with a lag.
Why hike now? Inflation hit 4.82 per cent in August, above the RBI's 4 per cent target. Oil prices are above 100 dollars a barrel. The US Federal Reserve also raised rates recently.
Markets will watch Governor Sanjay Malhotra's words at 10 am on Wednesday for hints about further hikes.
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Khabar 24h Editorial Desk — our explainers are prepared by the Khabar 24h editorial team using AI-assisted research tools, and every piece is reviewed by a human editor before publishing. We do not claim original reporting: our work is turning complex topics into simple, accurate summaries. Spotted an error? Write to contact@khabar24h.com — our corrections policy aims for same-day review.
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