Loans To Get Costlier As RBI Hikes Key Lending Rate To 3-Year High
NDTV
RBI's latest rate hike will weigh on already stretched household budgets as loans will get more expensive.
The Reserve Bank of India hiked its key lending rate by 0.5 per cent to a three-year high of 5.90 per cent, which will weigh heavily on the already stretched budgets of Indian households dealing with a rise in prices of almost every item.
The 50 basis points hike marks the fourth consecutive increase since May 2022. The rate hikes were made necessary by inflationary pressures, the situation in Ukraine, and microeconomic uncertainty in advanced economies from aggressive central bank policies globally.
That has had a contagion impact on the Indian economy and financial markets, forcing the RBI's hands to tighten policy more aggressively.
Indian banks are certain to pass on the latest RBI rate hike to customers immediately, as seen in recent months, making loans costlier and leading to higher equated monthly instalments (EMIs).
