Home-Car Lakhs of people have been waiting for a long time for the loan EMI to reduce. Loan EMI has not reduced due to RBI not cutting repo rate for last two years but now a good news has come. Bank of America (BofA Securities) and JP Morgan said that there is every expectation that loans will become cheaper in the February monetary policy. JP Morgan believes that the central bank has cut the liquidity by 50 basis points to increase liquidity in banks. Due to this the CRR has come down to 4%. It has become clear that RBI will cut the repo rate in the February policy. Another reason for the cut would be reduction in inflation. It is expected that inflation will come down by February and this will give an opportunity to cut the repo rate.
How much can be cut?
Experts say that in the February policy, the repo rate may be reduced by 50 basis points. After this, all types of loans including bank home loan, car loan will become cheaper. If inflation continues to decline, further cuts may be seen in the future policy. However, this will definitely have a negative impact on FD interest. Banks will cut FD rates. Therefore, this is a very good time for FD investors. Now it is not right to wait to get FD.
pressure from the government
Commerce and Industry Minister Piyush Goyal recently said that the Reserve Bank of India (RBI) should cut interest rates and accelerate growth. Chartered Accountant (CA) turned politician Goyal had said that due to food inflation, the RBI has not been able to take any action in rate setting for two years. The use of food inflation in determining interest rates is a ‘flawed theory’. Goyal had said that I believe that they should cut the interest rate. There is a need to further promote growth. We are the fastest growing economy in the world, we can do even better. From this it is believed that the pressure to cut the repo rate is from the government.
