It is estimated that the interest rate will stabilize in the next few months with the reduction in inflation.
PIn view of the declining inflation, the Reserve Bank has reduced the repo rate hike this year to a quarter percent. With this repo has become 6.50 percent. Governor Shaktikanta Das announced the rate hike after a three-day monetary policy committee meeting.
After raising the repo by 0.50 per cent three times, the increase was capped at 0.35 basis points in December. With this, the increase in repo rate since May is 2.50 percent.
It is estimated that the interest rate will stabilize in the next few months as inflation decreases. A rate cut is also likely at the beginning of the financial year 2023-2024.
Consumer price index-based inflation was below the RBI’s tolerance limit of six percent in November and December. But the aim is to keep it at four percent. The slight decline came after three consecutive quarters of highs since January 2022.