RBI raises interest rates, hikes FY27 growth forecast by 40 bps and inflation by 20 bps
The Reserve Bank of India has raised the repo rate by 25 basis points to 5.50% to combat rising inflation and shifting economic conditions. The central bank also increased its FY27 growth and inflation forecasts, signaling a move toward calibrated tightening.
Why it matters
This decision directly impacts borrowing costs for consumers and businesses in India, influencing loan EMIs and fixed deposit interest rates.
MUMBAI: The RBI raised the repo rate by a widely expected 25 basis points to 5.50% on Wednesday as stronger-than-expected growth and broader price pressures prompted the Monetary Policy Committee to unanimously vote for a hike and shift its stance from neutral to calibrated tightening.The move will raise the EMI on a Rs 1 crore loan over 15 years by around Rs 1,500 a month, or about Rs 1,471 at a base rate of 8.50%. If the EMI remains unchanged, the higher rate could extend the loan by about 5.5 to 5.9 months, equivalent to six additional instalments. The rate hike is good news for savers and retired individuals living on fixed income.
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