RBI hikes key rate to 5.5%, loans to get costlier
Business conditions in India are deteriorating as the RBI raises the repo rate, increasing borrowing costs, and severe weather in Uttar Pradesh threatens disruptions.
The Reserve Bank of India raised the repo rate by 25 basis points to 5.5%, marking the first increase in nearly four years, according to India Today. The Monetary Policy Committee unanimously voted for the rate hike during its three-day meeting from October 5-7. The RBI also shifted its policy stance to 'calibrated tightening', indicating no rate cuts are expected in the near term.
Impact Borrowers face higher costs as interest rates on home, car, and personal loans increase.