The results of five assembly elections in the country have been announced. Now the entire focus is on loan EMI related to the general public. RBI's MPC will announce interest rates on December 8. Before that, the country's largest lender SBI has made a big prediction. SBI in its report has expressed the possibility of when the loan EMI will be reduced. Apart from this, SBI has mentioned four possibilities in which it has been said that if RBI discusses all these things. If the repo rate is decided on those basis then what can be the interest rates. Let us also tell you what SBI has said in its report?
SBI's prediction regarding repo rate
According to economists at State Bank of India (SBI), the Reserve Bank of India (RBI) is unlikely to cut the repo rate by 6.5 percent before the second quarter of FY 2025 under any circumstances. This means that the EMI of common people is not going to reduce in the coming 6 to 9 months. At present the RBI repo rate is 6.5 percent. There has been no change in the repo rate in the last 5 RBI meetings. Last time an increase of 0.25 percent was seen in February.
SBI expressed 4 possibilities
SBI economists have considered four possibilities for repo rate. Earlier it was said that if the Monetary Policy Committee looks at only inflation data while deciding on the repo rate, then the current rate will be 5.93 percent.
In the second possibility, if the MPC had considered only the Fed rate hike while deciding on the repo rate, the current rate would have been 6.55 percent.
The third possibility is that if the MPC considers both inflation and Fed rate hike while deciding on the repo rate, then the current rate will be 6.53 percent.
According to the fourth possibility, if the MPC had considered inflation, core inflation and Fed rate hike while deciding on the repo rate, then the current rate would have been 6.64 percent.
Based on all possibilities, economists concluded that RBI may keep the repo rate unchanged at 6.5 percent.
There has been an increase of 250 basis points
SBI said in its report that the repo rate may remain at 6.50 percent for a long time. There is no possibility in our stance till June 2024. According to SBI economists, the inflation rate is unlikely to remain below 5 percent in the remaining months of financial year 2024. No change has been seen in the repo rate of RBI so far in the current financial year. The last time the repo rate was increased by 0.25 percent was in February 2023. RBI had increased the interest rate by 250 basis points from May 2022 to February 2023. According to SBI report, high oil prices are increasing inflation. Apart from this, global financial conditions are also not favourable. The fall in rupee against the dollar has also become a big factor.
Increase in loan
Total loans of all scheduled commercial banks increased by 20.6 percent year-on-year till November 17, 2023, whereas it was 16 percent last year. Over the same period, housing/commercial real estate grew by more than 35 percent year-on-year and aviation saw a growth of 67 percent year-on-year. There was a 22 percent increase in loans to the NBFC sector year on year. The report says that overall, there has been an increase of 6 percent in industry loans.
However, sectors like chemicals, metals, textiles, glass and food processing recorded double digit growth. In infrastructure, roads have seen a growth of 9 percent and telecom and railways have seen a growth of 7 percent. On the agriculture front, the loss in wheat sowing came down to 5 percent in the week of November 24. However, this year there has been a slight delay in sowing of major wheat, pulses and some oilseeds due to late Kharif harvesting. Due to the adverse effects of El Nino, paddy cultivation was stopped in some states.
No comments:
Post a Comment