Recently, RBI announced to hike short-term interest rates - repo and reverse repo - by 25 basis points. Raises in key rates by 25 bps may hike home and auto loans also.
About the key rates hikes, economictimes.indiatimes.com, a news portal writes, “Home loan rates may harden in April, banks will be hit by bond losses, and retail borrowers will have to cough up a little more EMI, with the Reserve Bank of India unexpectedly hiking interest rates on Friday evening, a month before the monetary policy.”
Further the news portal writes, “Banks pay the repo rate to borrow from RBI and receive the reverse repo rate for parking surplus funds with the central bank. The repo rate is up from 4.75% to 5% while the reverse repo rate is up from 3.25% to 3.5% with immediate effect.”
Chanda Kochhar who is the ICICI said to ET, “The bank will wait and see the credit offtake and systemic liquidity to assess the medium-term impact on lending and borrowing rates”. “Currently, there is ample liquidity in the market.”
According to the RBI, “Headline WPI inflation on a year-on-year basis at 9.9% in February 2010 has exceeded our baseline projection of 8.5% for end-March 2010.”
According to the Keki Mistry who is the vice-chairman and managing director of HDFC, “In the short term, cost of funds is unlikely to change much... It’s more a signal.”
Already almost all private banks have hiked interest rates for home and car loans. Now, it is the second phase when again home and car loans may hike after the hike of RBI key rates by 25 bps within a month.
In the analysis, RBI has raised the short-term interest rates - repo and reverse repo - by 25 basis points to control the inflation. What are your opinions about the hikes? Write to us your opinions about the hike. How will it affect the economy of India?
About the key rates hikes, economictimes.indiatimes.com, a news portal writes, “Home loan rates may harden in April, banks will be hit by bond losses, and retail borrowers will have to cough up a little more EMI, with the Reserve Bank of India unexpectedly hiking interest rates on Friday evening, a month before the monetary policy.”
Further the news portal writes, “Banks pay the repo rate to borrow from RBI and receive the reverse repo rate for parking surplus funds with the central bank. The repo rate is up from 4.75% to 5% while the reverse repo rate is up from 3.25% to 3.5% with immediate effect.”
Chanda Kochhar who is the ICICI said to ET, “The bank will wait and see the credit offtake and systemic liquidity to assess the medium-term impact on lending and borrowing rates”. “Currently, there is ample liquidity in the market.”
According to the RBI, “Headline WPI inflation on a year-on-year basis at 9.9% in February 2010 has exceeded our baseline projection of 8.5% for end-March 2010.”
According to the Keki Mistry who is the vice-chairman and managing director of HDFC, “In the short term, cost of funds is unlikely to change much... It’s more a signal.”
Already almost all private banks have hiked interest rates for home and car loans. Now, it is the second phase when again home and car loans may hike after the hike of RBI key rates by 25 bps within a month.
In the analysis, RBI has raised the short-term interest rates - repo and reverse repo - by 25 basis points to control the inflation. What are your opinions about the hikes? Write to us your opinions about the hike. How will it affect the economy of India?
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