RBI Repo rate increase

The Reserve Bank of India has rised RBI Repo Rates for the third time consecutively in three months.
The reason is to reduce the Inflation. But the Inflation shows no sign of reduce.
It is common problem with all developing Economy with hight Inflation.

What is REPO Rate - It is the rate at which the RBI leads money to the Banks. These Banks will inturn lends to us. So obviously if REPO increases our Banks lending rate will also increase.

The Impact of this mainly for the Retail Industry, Automobile industries, Finance. It is common that for the past 1 week seen a drastic dip in all stocks of Realestate and Automobile industry.


For a common man who borrowed loan for Housing or Car will have a tough time with it.
Before the recession(2008) the Repo Rate was at 9% which was at the peak. As the growth rate of India
economy started to suffer and maket went down, Government of India and RBI reduced the
REPO rate ot 4.5%(2009-2010) that is half of what it was in (2008). As the inflation seems to sky rocketing
RBI started to increase the REPO rates which is the only strong tool it has to control the Inflation.

We need to wait and see its impacts on the inflation. Since Banks are going to raise the interest.
The common borowers of the Home and Automobile are going to suffer.