RBI Governor said – Interest rates will remain high for a long time if Ukraine conflict continues

Will not get rid of expensive home and car loans soon: RBI Governor said – Interest rates will remain high for a long time if Ukraine conflict continues

Jan 15, 2023 - 18:41
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RBI Governor said – Interest rates will remain high for a long time if Ukraine conflict continues

Reserve Bank of India (RBI) Governor Shaktikanta Das has recently indicated that there will be no immediate relief on expensive loans. It is clear that for some more time, increased interest rates can be seen on home loans, car loans and personal loans.
Shaktikanta Das said that if the Ukraine conflict continues, interest rates may remain high for a long time. Along with this, he also noted that issues related to the supply chain could be improved. This will reduce inflation.
Das said in an interview on Saturday, 'I would like to say that this is not an indication of the decisions of the Monetary Policy Committee meeting to be held in February. If geopolitical tensions remain as they are now, interest rates will remain high for a long time. This can happen not only in the US but also in the whole world.
The RBI governor said, 'Despite the constant geopolitical tension, human society knows how to adjust to this new situation. The global supply chain has already improved. Along with this, new routes are being made. Countries of the world are looking towards new supply sources. This can bring down inflation.
Shaktikanta Das said the slowdown may be less severe than previously thought. “Six months back everyone thought there would be a recession in the European Union and the US, but now things have improved. However, interest rates are more likely to remain high for longer. In view of the uncertainties, one has to be prepared for all situations.
According to Shaktikanta Das, it will take 7 to 8 months for inflation to come down from the last rate hike. “Liquidity flows faster in an easier situation. But in a tight situation, it takes longer. Our research at RBI concludes that it will take four quarters for the impact to be felt.
Shaktikanta Das insisted that the RBI has to raise interest rates to control inflation when prices rise. Because if the economy stakeholders feel that RBI is tolerant of high inflation, they will start pricing the goods further increasing the cost.

Muskan Kumawat Journalist & Writer