Will interest rates rise?
With the inflation crossing 11 per cent, interest rates are set to rise, burning a hole in your pocket. The banks are expected to hike lending rates by at least one per cent soon. HDFC Bank has already hiked its prime lending rate (PLR) by 0.25 per cent. PLR is the interest rate that banks charge their most credit-worthy customers.
If you plan to take a loan, a higher rate would mean a higher equated monthly installment (EMI). In general, rate rises are good news for savers because deposit rates will go up. Banks are also planning to raise deposit rates by one per cent or more.
“Usually, deposit rates should be two per cent above the inflation. But the present situation being unusual, it should at least be at the level of inflation. Lending rates are usually, about three-four percent above deposit rates,” said DH Pai Panandiker, leading economist and president of RPG Foundation. The prime lending rates of banks are in the range of 12.75-13.25 per cent at present.
But bankers are cautious in their approach to raising rates. “We are watching the situation. We expect that inflation will moderate in coming weeks, having risen due to hike in petrol and diesel prices now. Based on one figure we may not react,” said MBN Rao of Canara Bank. “Inflation is expected to be above 11 per cent over the next three months. RBI may not be too aggressive. But, I think it may hike CRR first and hike Repo rate later,” Panandiker added.
Enter your email to get our daily newsletter in your inbox
- All ten vaccination centres across the city sported colourful curtains and were decorated with flowers. Some centres at BYL Nair hospital and Covid-19 jumbo centre at Bandra Kurla Complex also placed selfie spots with ‘I got my Covid-19 vaccine’ message in the backdrop.
- In its response, BKU-Lokshakti through its advocate AP Singh told the Court that the Delhi Police application was unnecessary as Section 144 of Criminal Procedure Code is already in place in central Delhi which restricts gathering of five or more persons.
- The health ministry on Saturday said that close to 200,000 people were vaccinated on Day 1 of the drive.
- The Santacruz station of the Indian Meteorological Department (IMD) recorded a minimum temperature of 16.6 degrees Celsius, a degree below normal. This is the second lowest minimum temperature recorded this season following a mercury drop to 16 degrees Celsius on December 22 last year.
- The DoPT is the nodal ministry for the CBI and any administrative action against Class-I gazetted officers (DSPs) is approved by it while the CBI Director has powers to suspend Inspectors and below rank officers.
- The CM said that policies have been simplified and they would be further eased to help those wanting to contribute to Bihar’s progress in different ways.
- Billed as Asia’s oldest and India’s biggest festival, IFFI is being held in Goa since 2004. This year the festival will open with the Indian premiere of the movie ‘Another Round’ by Thomas Vinterberg.