The actual increase in the EMIS will be a function of the tenure and the amount of the loan, but the 2.5 percentage point increase in the policy rate (including the latest one) since May 2022 has seen monthly payments on long-term high-value home loans increase by as much as 23-25%.
The hike, which many experts see as the last in the current monetary tightening cycle, will also raise the borrowing cost for corporate borrowers, increasing the cost of capital.
MPC expects GDP growth of 6.4% for 2023-24, which is largely in line with the 6.5% baseline forecast given in the Economic Survey.
The inflation situation is expected to improve significantly in the next fiscal year, with headline Consumer Price Index (CPI) expected to fall from 6.5% in 2022-23 to 5.3%.
A key factor in the RBI's inflation forecasts is an expected moderation of crude oil price from $100 per barrel to $95 per barrel, both of which are higher than the current price ($80.8 per barrel on January 7).
While the rate hike and its quantum was in line with analyst estimates, MPC's decision to retain a withdrawal of accommodation stance for monetary policy has conveyed a slightly hawkish message on part of the central bank. To be sure, there was a division of opinion within MPC on both the rate hike and policy stance with two external members voting against this decision.
A research note by Soumya Kanti Ghosh, group chief economic adviser at State Bank of India, seems to echo the sentiments of the dissenting MPC members.
This story is from the February 09, 2023 edition of Hindustan Times.
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This story is from the February 09, 2023 edition of Hindustan Times.
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