The EMIs on home and auto loans are unlikely to come down in the near term as the Reserve Bank on Tuesday kept the Repo rate unchanged at 6.75%.
The RBI has also kept the Cash Reserve Ratio( CRR) unchanged at 4%. The Reverse Repo Rate also remained the same at 5.75%.
RBI sees FY16 growth at 7.4 percent with a downward bias and FY17 growth at 7.6 percent despite headwinds.
The Reserve Bank will adjust the forecast path as and when more clarity emerges on the timing of implementation. Vagaries in the spatial and temporal distribution of the monsoon and the impact of adverse geo-political events on commodity, RBI said. in its sixth bi-monthly policy statement.
With unfavourable base effects on the ebb and benign prices of fruits and vegetables and crude oil, the January 2016 target of 6 percent should be met, the RBI said.
Under the assumption of a normal monsoon and the current level of international crude oil prices and exchange rates, inflation is expected to be inertial and be around 5 percent by the end of fiscal 2016, it added.
The RBI is most likely to achieve its January 2016 target of having inflation under the 6 percent mark, but is committed to getting the headline number down to 4 percent in two years from now.
In the last calender year, RBI reduced key policy rates by 1.25 percentage points. Both WPI and retail inflation have been on a rising trend.
In December, WPI-based inflation stood at (-)0.73 percent, while retail inflation moved up to 5.61 percent.
However, the implementation of the 7th Central Pay Commission award, which has not been factored into these projections, will impart upward momentum to this trajectory for a period of one to two years. The RBI will also create a special ecosystem for startup funding.