Interest rates will decrease after GST rate cuts, home loans will become cheaper, RBI Governor may provide major relief

News Topical, Digital Desk : After a major cut in GST rates in September, the common man may get another big gift in December. In fact, a new report says that if the 50 percent tariff imposed by the US remains in effect till the end of this year, then the Reserve Bank of India (RBI) may cut interest rates (RBI Rate Cut) by 25 basis points in December, due to which the repo rate will come down to 5.25 percent. If this happens, then interest rates on other bank loans including home loans will come down, along with this, EMIs of home loans and car loans will also decrease.

The HSBC report also suggests that the government may announce new economic reforms as well as a fiscal package for exporters to support growth.

What the report estimates

The report emphasized that retail inflation has fallen to an eight-year low, giving the RBI more room to ease monetary policy. Consumer Price Index (CPI) inflation for September stood at 1.5 percent year-on-year, the lowest since June 2017.

This decline in inflation was primarily due to lower vegetable prices, robust grain production, and stockpiled grain stocks. Food prices declined both annually and sequentially.

Average inflation for the July-September quarter stood at 1.7 percent, slightly lower than the RBI 's estimate of 1.8 percent. However, headline inflation remained elevated due to a sharp rise in gold prices, which rose nearly 47 percent year-on-year in September. Gold alone contributed nearly 50 basis points to the core Consumer Price Index (CPI).