According to a recent press report Mr.T.C.A. Ranganathan, the Chairman and Managing Director of Exim Bank, said that there could be more rate hikes as inflation indices were still ruling high.
He said that the recent policy rate hike by the RBI will not be the last time that we are seeing a rate hike, but the cycle may continue because of the rising inflation. The Reserve Bank of India has recently raised its key policy rates by 25 basis points to control inflation.
He added saying that the rise in non-performing assets of public sector banks was not just because of the rise in interest rates but due to the economic slowdown. The home loan and other loan borrowers are troubled by the continuous hike in lending rates.
Mr. Ranganathan said that the financial situation in the US and Euro zone was encouraging Indian exporters to look at newer geographies such as Latin America and Africa. He also said that the profit margins of corporate might come under pressure because the cost of borrowing overseas was growing higher. He added saying that this might also support exporters to diversify to newer markets.