Banks have risen demand for status quo on RBI’s repo rate in monetary policy for the coming December. This demand has its basis on the expectations of fall in inflation due to the reports of better growth data as a result of good monsoon.
At the present when the appetite for lending is quite low repo rate rise would affect the banks negatively. Hence, the repo rates are kept the same it would help the banks get some relief. Presently, 7.75% is the repo rate, i.e. the rate at which the banks would be able to borrow sums from the central bank. The banks will have to wait till December 18 for knowing the new interest rates at which they would be able to borrow money from the controller bank. However some of the banks like SBI,HDFC raised their base rate leading to the rise in EMI of consumer loans.
According to Yes Bank’s Chief Economist Shubhada Rao, the repo rates are not likely to increase in the December policy. However, the same may rise in the Q4 of this fiscal year