RBI Update - Cash Shortage May Push Loan Interest Higher | Latest updates | DAR FOCUS

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RBI Update - Cash Shortage May Push Loan Interest Higher | Latest updates | DAR FOCUS

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Even if the Reserve Bank of India keeps the repo rate unchanged, there is still a possibility that loan interest rates may rise due to liquidity shortages in banks. When banks face a shortage of funds, they tend to increase lending rates to manage demand and maintain margins. This means borrowers could end up paying higher EMIs despite no change in the official policy rate. Understanding these dynamics is crucial for making smart financial decisions.

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