around the world economies Due to the fear of recession, pressure is being seen on the domestic economy. Institutions across the world are revising their growth estimates in view of global cues. The reason for this is the increase in rates by the central banks. Whose pressure is visible on the development of the world and due to this there is pressure on the Indian economy as well. For now, the Reserve Bank has made it clear that controlling inflation is its biggest concern, which is why it is raising rates despite fears of a recession. There is a policy review meeting of the Reserve Bank next month. If indications are to be believed, the question of rate relief in the next policy review is out of the question and more rate hikes are likely.

What is the rate hike forecast?

Moody’s estimates that the Reserve Bank may increase the repo rate by 0.50 percent to bring inflation under control and support the exchange rate. Goldman expects the Reserve Bank to continue raising rates. The brokerage said that the Reserve Bank of India may increase the repo rate by 0.50 basis points in the December monetary policy review meeting and 0.35 percent in the February 2023 meeting. With this, the repo rate will reach 6.75 per cent by February next year. It is clear from this that your EMI may increase further in the coming times.

Why will the interest rate increase?

In fact, higher interest rates are likely to stifle growth. However, even after the recent rate hike, India’s growth is expected to remain the highest among the world’s major economies. For this reason, the Reserve Bank is focusing on bringing the inflation rate below 6 percent. Only last month, RBI’s Monetary Policy Committee (MPC) member Ashima Goyal said that frequent interest rate hikes would help curb inflation, adding that the hike in policy rates has reversed the downward trend during the pandemic. has been reversed, but real interest rates are still too low that this will not happen. Growth hurt the improvement.

He meant that rates were cut during the pandemic but now rates are rising so the actual increase is not based on data from recent years. However, he admitted that after two-three quarters the actual rates would reach a higher level and this would impact demand. However, by then inflation will come under control and cost pressure on the industry will ease.