MUMBAI/NEW DELHI: The RBI’s 25-basis-point (100bps = 1 percentage point) repo rate hike is good news for depositors as the increase in lending rates would mean that the banks will have more headroom to offer higher returns without sacrificing their margins.
RBI governor Shaktikanta Das said the rate hike has resulted in the real policy rate (rate adjusted for inflation) moving into positive territory.
Many analysts expected the governor to do a policy pivot and hint at pausing rate hikes. However, there was no such reassurance, and Das said it was impossible to give forward guidance.
While some new borrowers with a high credit score can borrow at 8.5% thanks to the competition for home loans, the older borrowers who took loans at 6.5% earlier this fiscal will see their borrowing cost rise to 9%. Das said that economic activity remains resilient and urban activity is firming up, especially in services — travel, tourism and hospitality with domestic air passenger traffic crossing pre-pandemic level. “Several high-frequency indicators also point toward the strengthening of activity. Investment activity continues to gain traction. The total flow of resources to the corporate sector increased to over Rs 20.2 lakh crore as against Rs 12.2 lakh crore a year ago,” said Das.
While the governor remained cautious about inflation, he said he was optimistic about the economy.
Start a Conversation
Post comment