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. Top of Form
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The RBI had hiked short-term lending rates by 25 basis points in its last review, in order to control inflation. It also indicated that other such increases can be expected in the future.
Reports said that analysts are expecting at least another 25 basis point hike in lending rates this time. It said that the food inflation came down to an over two-year low for the week but the overall inflation is still hovering close to double digits. Apart from this reports said that the Stocks markets have also reflected worries of another rate hike.