Common man's say on the rate hike

Common man's say on the rate hikeWhile the central bank, Reserve Bank of India has recently announced a hike in the short-term borrowing rate (reverse repo) by 0.50 percent and lending rate (repo) by 0.25 percent in its quarterly review of the monetary policy, housing loan, auto loan, education loan are likely to move northwards from the next month.

It is to be mentioned here that repo rate is a rate at which the banks borrow funds from RBI and any increase in the same clearly means that borrowing will be more expensive.

As far as the experts are concerned, they believe that the move is to control inflation without disturbing the growth of the economy. But the move is surely going to cost much more to the common man.

Deputy Governor Subir Gokarn said in an e-mailed statement said that the RBI is still worried on the pace on price increase.

On the other end, some may have to postpone their buying decisions as the costs are expected to go up in the coming month. Be it education, cars or homes, all of it will cost more to the consumer next month onwards.