The RBI kept the interest rates unchanged and shows that it could cut key policy rates from now onwards to capture falling growth.
Banks have raised their base rates, or the minimum lending rate, by 1.5-4 % between July’10 to Nov’11. Nonstop rate hikes have not only cut the demand for loans but also raised fears of defaulting
The RBI’s policy will help those home loan customers who have taken their loans on a floating basis because bank has clearly indicate that interest rates will go downward from current levels. RBI pause on key policy rates hikes has come after 21 months, over which the RBI has hiked rates 13 times. These hikes have been passed on to consumers, almost every time, making equated monthly installments (EMIs) and loans costlier.
RBI’s latest move has brought smiles for existing consumers of housing loan. For many others, many have postponed their decision to buy a new house, good news might be on the anvil soon. Bankers have said that while an imminent cut in interest rates was not possible, such a possibility would occur starting January 2012.
Indian Overseas Bank Says “This time is not right to cut interest rates. though, going forward if interest on deposits don’t become more tight, there will be quite a lot of flow of resources and accordingly for giving momentum to credit, banks need to respond,”.
RBI’s gives bonanza offers for real estate companies, who have reported falling sales because of rate hikes.
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