A recent press report said that banks are looking at the Reserve Bank of India (RBI) to increase base rates as it takes up a review of the monetary policy.
Reports said that if the RBI hikes the interest rates then it would be the 11th rate hike since January 2010 and could result in commercial banks passing on the increase to its lenders. It will make loan such as home loan, car loan, personal loan, business loan etc much costlier.
Reports said that the RBI the RBI had hiked short-term lending rates by 25 basis points in its last review, in order to inflation and indicated that more such increases were in the offing.
Analysts expect at least another 25 basis point hike in lending rates this time around. Though food inflation came down to an over two-year low for the week ended July 9, overall inflation is still hovering close to double digits.
Stocks markets, too, reflected worries of another rate hike. The 30-scrips Sensex of the Bombay Stock Exchange was ruling subdued in pre-open trade Monday.