Winning Bizness Desk

Mumbai. The prices of food items, especially vegetables and fruits, have come down, so the retail inflation rate has come down. As prices of food items keeps coming down, the retail inflation rate has also come down to an 11-month low of 5.88 percent in November. From the government to the RBI, they are heaving a sigh of relief. In April 2022, when the retail inflation rate reached the level of 7.79 percent, since then the RBI has increased the repo rate five times to crack down on it through monetary policy. RBI increased the repo rate from 4 percent to 6.25 percent in 7 months. As a result, the EMI of the people became expensive. But the question arises that will the common people benefit from the fall in inflation rate?

Crude oil prices also lower

 It is a matter of relief for India that the prices of crude oil have come down in the international markets and it has come down to below $80 per barrel. Whenever the government decides to reduce the prices of petrol and diesel, it will reduce the prices of fuel, which will reduce inflation. Because traveling to freight will be cheaper. If the government accepts the suggestions of the Kirit Parikh Committee, formed to fix the prices of domestic gas, then CNG-PNG will also be cheaper, which can reduce inflation.

Loans to become cheaper

A decrease in the retail inflation rate means that there may be a break in the process of loan being expensive. RBI has increased the repo rate five times in 2022. But in December 2022 and January 2023, if the retail inflation rate remains below the upper band of RBI's tolerance level of 6 percent, then in the monetary policy meeting to be held in February 2023, RBI may apply brakes on increasing interest rates. That is, there will be no increase in the repo rate. But it will take time to get relief from expensive debt. According to former Chief Economic Advisor of SBI Vrinda Jagirdar, RBI had said that there is a trend of decreasing inflation in future. There will be less worry about inflation. If the inflation is low, then RBI will not make any change in the repo rate in the upcoming monetary policy and will keep it at the current level.