Home, car loans to get costlier
PRABHAKAR SINHA
df('20 Mar 2010, 00:51',3);
Interest rates on home, car and other retail loans are set to firm up in near future as the RBI on Friday hiked the rates at which it takes deposits, and lends short-term funds to banks by 25 basis points.Home, car loans to get costlier
PRABHAKAR SINHA
df('20 Mar 2010, 00:51',3);
Interest rates on home, car and other retail loans are set to firm up in near future as the RBI on Friday hiked the rates at which it takes deposits, and lends short-term funds to banks by 25 basis points.

MUMBAI: The Reserve Bank on Friday raised its key short-term lending and borrowing rates by 25 basis points each as part of its tight money policy to combat inflation, which the government feels is a cause of concern. The repo and reverse rate (short-term rates at which RBI lends and borrows from banks) were hiked to 5%t and 3.5% respectively and could make banks commercial lending dearer. "These measures should anchor inflationary expectations and contain inflation going forward," the Reserve Bank said a month ahead of the announcement of its annual monetary policy on April 20 for 2010-11. Finance Minister Pranab Mukherjee has expressed concern saying inflation is heading to double digits from to 9.89% at present while at the same time not giving up on growth. "As liquidity in the banking system will remain adequate, credit expansion for sustaining the recovery will not be affected", RBI said.