People paying interest on home loans can breathe easy for now. The Reserve Bank of India (RBI) has gone against most central banks worldwide and given a pause to the series of hikes in repo rate. But the relief could only be momentary as experts believe a rate hike is bound to take place. The question is not if, but when.The pause in repo rate hikes comes after the RBI increased the key interest rates six times since May last year. The RBI has so far raised the repo rate by 250 basis points cumulatively since May last year.
A basis point is one-hundredth of a percentage point or 0.01%.
The repo rate now stands at 6.5 per cent.
In the monetary policy meeting of the RBI, which tackles several issues, the repo rate announcement is what interests most people because their loan interest rates are tied to it.
Several experts believed that the RBI would raise the key lending rate by 25 bps at Thursday’s Monetary Policy Committee’s meeting and the RBI’s pause actually came as a surprise.
