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RBI hikes repo rate again, loans will become expensive

RBI hikes repo rate
Written by bobby

RBI hikes repo rate again, loans will become expensive: The Reserve Bank has announced its monetary policy today. Like the last two times, this time also RBI has increased the repo rate. This time the RBI has increased the repo rate by 0.50 percent. With this increase, the repo rate has now reached the level of 5.40 percent. The announcement of monetary policy was announced by RBI Governor Shaktikanta Das in Mumbai today.

The Repo rate increased twice before

RBI has increased the repo rate twice before today. In these bars, there was an increase of 0.90 percent. Earlier today, on 8 June 2022, and earlier on 4 May 2022, the repo rate was increased. While the repo rate was increased by 0.40 percent in May 2022, the repo rate was increased by 0.40 percent in June 2022.

Shock: RBI hikes repo rate again, loans will become expensive

History of repo rate in Modi government

The history of the repo rate in the Modi government is quite interesting. During the tenure of the entire Modi government, this rate has never been the same as it was just before the Modi government was sworn in. When the Modi government took over, the repo rate was 8 percent, which has never happened again.

This is the journey of repo rate

-8 June 22 at 4.90 percent
4.40 percent on May 4, 22
-4 percent on 10 February 22
-4 percent on 8 December 21
-4 percent on October 8, 21
-4 percent on August 6, 21
-4 percent on June 21
-4 percent as on 7 April 21
-5 February 21 at 4.00 percent
-4.00 percent on December 20
-9 October 20 at 4.00 percent
-6 Aug 20 at 4.00 percent
-4.00 percent as on 22 May 2020
-4.40% as on 27 March 2020
-5.15 per cent as of October 4, 2019
-5.40 percent as on 7th August 2019
5.75 percent as on 6th June 19
-06.00 percent on 04 Apr 19
6.25 percent as on 07 Feb 19
-6.50% as on 05 Dec 18
-6.50% as on 05 Oct 18
6.50 percent as on 01 Aug 18
-6.25% as on 06 Jun 18
-6.00% as on 05 Apr 18
6.00 percent as on 07 Feb 18
-06 Dec 17 6.00 percent
6.00 percent as on 04 Oct 17
-06.00 percent on 02 Aug 17
6.25 percent as on 08 Jun 17
-6.25% as on 06 Apr 17
6.25 percent as on 08 Feb 17
6.25 percent as on 07 Dec 16
6.25 percent as on 04 Oct 16
-6.50% as on 05 Apr 16
– 6.75 percent on 29 September 15
7.25 percent as on 02 Jan 15
7.50 percent as on 04 March 15
-7.75 percent as on 15 January 15
8.00 percent on 28 Jan 14

Shock: RBI hikes repo rate again, loans will become expensive

Meaning of words used in monetary policy

What is the repo rate

The Repo rate is the rate at which RBI lends to banks. Banks give loans to customers with this loan. A lower repo rate means that many types of loans from the bank will become cheaper, such as home loans, vehicle loans, etc.

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What is the reverse repo rate?

As the name suggests, it is the reverse of the repo rate. It is the rate at which banks get interested on money deposited by them with RBI. The reverse repo rate is used to control the liquidity of cash in the markets. Whenever there is a lot of liquidity in the market, RBI increases the reverse repo rate, so that the bank can deposit its money with it to earn more interest.

Shock: RBI hikes repo rate again, loans will become expensive

What is CRR

Under the banking rules applicable in the country, every bank has to keep a certain part of its total cash with the Reserve Bank. This is called the cash reserve ratio or cash reserve ratio.

What is SLR

The rate at which banks keep their money with the government is called SLR. It is used to control the liquidity of cash. Commercial banks have to deposit a specific amount which is used to complete an emergency transaction. When RBI wants to reduce the liquidity of cash without changing interest rates, it increases the CRR, this leaves less money with the banks to lend.

About the author

bobby

Hi, I am Bobby. Blogger India. I love writing, and reading articles. Blogging is my passion. I have started my blogging career in 2016.

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