After the fall in retail inflation, the possibility of a reduction in interest rates in the meeting of RBI’s Monetary Policy Committee has increased. Know, what will the impact be on your EMI, and how will you get financial relief.

Will RBI give relief in interest rates

The possibility of a reduction in interest rates has increased in the meeting of RBI’s Monetary Policy Committee (MPC) to be held in the second week of April. The retail inflation rate figures announced in February have come below the target of 4 percent.

On March 12, the Ministry of Statistics released the retail inflation rate data, according to which the retail inflation rate in February came down to 3.61 percent, which was 4.3 percent in January.

Will the burden of EMI be reduced

From 7-9 April, the Monetary Policy Committee will meet under the chairmanship of RBI Governor Sanjay Malhotra. In this meeting, people troubled by expensive EMI can get relief once again. Earlier on February 7, RBI had reduced the repo rate from 6.50 percent to 6.25 percent.

Now there is every possibility that when the RBI Monetary Policy Committee meets in April at the beginning of the new financial year 2025-26, RBI may again decide to cut the repo rate, given the big drop in retail inflation.

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A significant drop in food inflation

Food inflation has come down drastically in February. Food inflation fell to 3.75 percent in February from 5.97 percent in January. Food inflation has been a matter of concern for RBI for a long time. Inflation has come down due to a fall in vegetable prices and inflation is expected to come down further due to better Rabi crops.

According to experts, RBI MPC cut the repo rate by 25 basis points in February. Now after the fall in inflation, the process of cutting the repo rate by RBI may continue in the upcoming Monetary Policy Committee meeting, to boost consumption.

CPI inflation at 4-month low

CPI inflation has reached a 4-month low. This is due to the reduction in food prices. Consumption in the economy can only be boosted by controlling food inflation. Retail inflation close to 4 percent is good from a policy perspective, as it opens up the possibility of interest rate cuts in April.

Announcing the RBI monetary policy in February, Governor Sanjay Malhotra said that after inflation moved above the tolerance band in October 2024, it saw a decline in November and December.

Future inflation forecast

In the coming days, food inflation pressures may ease due to better kharif crop production without supply-side shocks, a reduction in vegetable prices in winter, and the possibility of excellent rabi crops. Taking all these things into account, inflation is estimated at 4.8 percent in the current financial year 2024-25, while inflation in the fourth quarter maybe 4.4 percent.

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