This week’s monetary policy announcement clearly indicated that RBI is unwilling to fall in line with the Government’s demand. The RBI has taken a stance that challenges the Government, sending clear signals to the Government and its citizens that it has to work hard to tame inflation. RBI is looking at seeing more resilient levels of inflation before deciding on the rate cuts, which many sectors are looking forward to.
Home loan rates currently are in the range of 10-10.25% and would continue to remain there. Lending rates maintain status quo till February 2015 and that is when the RBi will announce the last monetary policy for the fiscal, and might cut rates outside policy review.
The global oil prices are easing and with import restrictions on gold removed, inflation is expected to go down further giving a cushion effect to the economy.
In days to come the interest rates on housing loan may come down to as low as 8%, similar to 2006-2007 period. This period as experts at Ikia Consulting Services feel, is the right time to switch to floating interest rate loans – since over the next few years banks and financial institutions will be happy to pass on lower interest rates benefit to their clients.
Source : The HIndu