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The recent monetary policy review is aimed at curbing the rising inflation rate. There is some good news for homebuyers as this credit policy has left the key rates untouched, and the CRR hike will not push home loan rates up, says Ashish Gupta The Reserve Bank of India (RBI) hiked the cash reserve ratio (CRR) in the monetary policy review last week. Despite a more-than-expected hike in the CRR, banks have, in general, ruled out any immediate hike in lending rates. According to bankers, there is abundant liquidity in the system and they can absorb the increased cash reserve requirement. In order to tackle the rising inflation rate, the RBI hiked the CRR (the amount banks have to park with the central bank) by 0.75 percent to 5.75 percent, but left the key rates untouched. The 75 basis points increase in the CRR to 5.75 percent is expected to draw out at least Rs 36,000 crores from the system. This move is mainly to check the food price inflation from spreading to other sectors. The RBI said the CRR will be increased by 50 basis points from February 13, and a further 25 basis points to 5.75 percent from February 27. The bank rate, used by banks to price long-term loans, remains unchanged at six percent. According to a RBI estimate, the inflation rate is likely to touch 8.5 percent by this fiscal end from over seven percent in December last year. Earlier, in October last year, the RBI had projected the rate of price rise to be around 6.5 percent by March 2010 end. According to analysts, there won't be any immediate pressure on interest rates. While a 0.75 percent hike in the CRR can put some upward pressure on short-term rates, long-term rates are unlikely to be affected in the near future. The RBI is unlikely to revise rates before April if the inflation rate remains at around 8.5 percent. The RBI has already factored this into its inflation projection till March and is not likely to take any mid-term action. In the January review of the monetary policy, the RBI increased the inflation forecast from the earlier projection of 6.5 percent. The present RBI actions are targeting the abnormal rise in the inflation rate. However, given the credit off take level in the system, banks are unlikely to effect any increase in their loan rates in the near future. The fact that interest rates have not been increased will continue to spur demand. As of today, banks are flush with funds. As a result, home loan interest rates are expected to remain steady in the coming months. Courtesy:- TOI dt:- 13-02-2010 For more information regarding 4 bhk apartment, apartment in gurgaon, bedroom apartments, buy property in india, commercial complex in india, commercial real estate, commercial space in gurgaon, dealers, flats for sale, indian real estate investment, investment options in real estate, luxurious flats, malls, office space, office space in gurgaon, online real estate, penthouses gurgaon, plots, property consultants, property in gurgaon, property india, property investment, real estate company, real estate developer, real estate gurgaon, real estate in india, real estate investment strategies, real estate market, real estate news, real estate portals, realtors, realty, residence, residential real estate, sell property, shop, villas, Residential Apartment Visit www.zameen-zaidad.com www.propertycafeteria.com
Article Source: http://www.bharatbhasha.net Article Url: http://www.bharatbhasha.net/home_business.php/218659 Article Added on Thursday, February 25, 2010
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