A recent press report said that the Reserve Bank of India has hiked repo rate by 25 basis points, taking it to 8.25% and adjusted the reverse repo rate to 7.25%.
According to reports, Mr. Keki M Mistry, vice chairman and chief executive officer, HDFC said that the markets were expecting a 0.25% increase in rates. He further said, he would believe that sometime in April or post April 2012 RBI could start looking at cutting these rates again.
When asked if the rate hike would get passed on, he said that even after the policy announcement, the interest rates in the system has not sparked up at all and so the policy hike is not likely to get passed on. He said that it is already absorbed.
The RBI has recently hiked base rates by 25 basic points, in order to control inflation. The hike in base rate has affected the home loan and other loan borrowers as the hike in base rates by the RBI has pushed banks to hike their lending rates.