RBI likely to hike repo rate by 25 bps

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RBI likely to hike repo rate by 25 bps

#1 Postby Shivani » Mon Oct 28, 2013 11:05 am

According to a poll by ET, RBI Governer, Raghuram Rajan is likely to raise the repo rate by another 25 basis points, keeping up the fight against inflation, the announcement is expected to happen when he is going to announce his next monetary policy also, on Tuesday.

If the same will happen and RBI will hike the repo rate by 0.25 basis points then the same will directly effect your EMIs and may may send up your EMIs.Because a repo rate hike forces banks to hike their lending rates as their borrowing costs rise. High food prices pushed up the September wholesale price Index (WPI) based inflation to a seven-month high of 6.46%. Retail inflation too rose, to 9.84%, during the month.

The central bank is also expected to slash the Marginal Standing Facility (MSF) rate —the rate at which the RBI lends emergency funds to banks — in view of the stability in the rupee.

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