look news india
The US presidential election took place. Recently Donald Trump has become the President of America. The impact of the decisions and policies taken by Donald Trump is being seen on all the markets of the world. In such a situation, the American Federal Reserve not changing its interest rates is a sign of major changes for the world. After the budget to be presented on 1 February, the Reserve Bank of India will also announce its bilateral monetary policy on 7 February. So will the RBI decide to reduce EMI or not?
Interest rates remained stable
The important thing is that the US Federal Reserve predicted to ban its range of interest rates cuts. But this possibility turned into reality after Donald Trump was elected President. Earlier, the Federal Reserve had cut interest rates twice in November and December meetings and cut interest rates by more than 1 per cent. Currently, the interest rate of Federal Reserve will be between 4.25 and 4.50 percent.
RBI’s monetary policy
Two major financial events are going to happen in India after Donald Trump became US President and keeping interest rates unchanged by the Federal Reserve. First, on 1 February 2025, the government will present the budget for FY 2025-26. Subsequently, the Reserve Bank of India calendar the first monetary policy for the year 2025 and the last monetary policy for the financial year 2024-25 is coming on 7 February. In such a situation, the effect of the change in America can be seen on both these incidents.
Recently, RBI has got its new head. In such a situation, Governor Sanjay Malhotra will also be under pressure to deal with the impact of Federal Reserve policy. The monetary policy of the Reserve Bank of India works to control inflation domestically, but it also works to combat foreign effects.
Significantly, despite reviewing its monetary policy in April 2022, the Reserve Bank of India suddenly met in May and increased the interest rate by 0.40 percent. Then the Russia-Ukraine war poses a threat of inflation, which led to an increase in interest rates in the country. Whereas at the same time, the Federal Reserve of America was also to be met and it was expected that the interest rate in America would be increased by 0.50 percent. It was feared that this would cause havoc on the Indian stock market, so the policy rate was increased at that time.
What will be less your EMI?
Now the question is whether the RBI will cut interest rates on 7 February, so that your EMI burden can be reduced. Soon after the monetary policy of December, the country’s Finance Minister Nirmala Sitharaman stated the need to cut interest rates to promote development in the country. But no cuts were made at that time due to high food inflation. Meanwhile, it took not much time to cut interest rates by the US.
However, since the US has put a brake on it, the RBI can cut interest rates by up to 0.25 per cent during the next monetary policy review. However, the decision will depend on factors such as Donald Trump’s new trade policy and food inflation still high.