Interest rate to remain stable for next 3-4 mths: Parekh
Interest rates are likely to remain stable in the next 3-4 months and the large government-borrowing programme would have no impact on the rates, as there is sufficient liquidity in the market, HDFC Chairman Deepak Parekh said today.india Updated: Jul 07, 2009 19:29 IST
Interest rates are likely to remain stable in the next 3-4 months and the large government-borrowing programme would have no impact on the rates, as there is sufficient liquidity in the market, HDFC Chairman Deepak Parekh said on Tuesday.
"There is sufficient liquidity so far in the market. I don't think it (rate) is going to harden that much at least in the next three to four months," he said, when asked if the government borrowing programme will have an adverse impact on interest rates.
"Government borrowing programme is over longer period of time and Finance Minister did say he will work with RBI and find a way to minimise borrowing," he said.
However, he said, the short-term rates remained soft but the long-term yields hardened yesterday after the Finance Minister announced the borrowing target for the fiscal.
The government plans to borrow nearly Rs 4,00,000 crore from markets during 2009-10, a rise of about 50 per cent over what it borrowed a year ago, to fund the widening fiscal deficit necessitated after stimulus doses for the economy.
The net market borrowing of the government through issue of dated securities in 2009-10 is estimated at Rs 3,97,957.46 crore, Finance Minister Pranab Mukherjee had said while presenting the Budget 2009-10 yesterday.