RBI policy rate hike to immediately pinch retail customers

The Reserve Bank of India has raised its policy rate by 25 basis points to 5.50%, marking its first increase since February 2023. This move will make floating-rate loans, such as home, car, and personal loans, more expensive for consumers. As a result, borrowers on these types of loans may face higher monthly payments or longer repayment periods. This rate hike will immediately affect retail customers who have floating-rate loans, making their debt more costly.

Why it matters

The RBI has raised the repo rate by 25 basis points to 5. 50%, which could make floating-rate home, car and personal loans more expensive.

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