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Home loans rates set to rise, GDP growth to slow
As if the high inflation rate you’ve been combating for more than a year now was not enough, now your home loan rates are set to rise — again. The RBI on Tuesday raised the repo rate — the rate at which the RBI lends to commercial banks — by 50 basis points. HT reports. Save more too | War on inflation
As if the high inflation rate you’ve been combating for more than a year now was not enough, now your home loan rates are set to rise — again.
The Reserve Bank of India (RBI) on Tuesday raised the repo rate — the rate at which the RBI lends to commercial banks — by 50 basis points. Hundred basis points make 1 percentage point.
This is the ninth hike that has taken the repo rate to 7.25% from 4.75% in 13 months and is expected to control inflation, hovering around 9%.
The RBI has also projected a slower GDP growth at 8% against the 9% estimate the government made in Budget 2011.
While IDBI Bank immediately announced a 50 basis point hike in its base rate on Tuesday that will result into an increase in lending and deposit rates by 0.5 percentage points, most banks are expected to follow in the next few days.
“If we add all the factors, the impact of all those additions could be in the range of 50-100 basis points,” said Chanda Kochhar, CEO and MD, ICICI Bank.
“The SBI lending rates are expected to go up by 25-50 basis points in the next two-three months,” said Pratip Chaudhury, SBI chairman who announced an increase in the bank’s lending rates only a week ago.
