Expecting a Rate Cut tommorow

It is high time for RBI to announce a cut in the interest rates. I hope there would be atleast 25 point basis rate cut and i would be surprised it RBI cuts 50 point basis. There is tremondous pressure on the apex bank to cut rates after Fed’s cut their rates last week by 75 points basis.

I would be happy to see if the RBI cuts the rates which would eventually lead to cut in home loan rates. The home loan market was severely battered last year with rates going up to 12%.

As rediff right quotes Further slashing in Fed rate would create the situation of “arbitrage opportunities” for the global investors wanting to shift their funds from the low yield US and other developed markets, to high-return Indian market “This would lead to surge in the capital inflows and aggravation of the problem of rupee appreciation,”

I hope there will be a rate cut tommorow. Pray So :)

2 Comments

  1. Praveen

    Rates have not been changed citing fear of inflation and over liquidity.The money supply is 6% more than desired level.
    http://economictimes.indiatimes.com/RBI_keeps_rates_unchanged_banks_to_tow_line/articleshow/2739936.cms

  2. Satheesh

    Also, doesnt home loan rates follow LIBOC than the RBI rate cuts? RBI is merely stupid entity in India. If they’ve acted rightly, we wouldn’t see 6-8% inflation(remind you, its officaial number) and for people who actually consume food, medicine and energy, it might very well be 15%. Anyway, I think it might be good to protect the inflation than bubbling RE, and if they have any sense, they wouldn’t cut rates. Lets wait and see.

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