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Home loan rates to fall by 25-50 bps: DHFL

Source: PTI
June 19, 2009 15:45 IST
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As liquidity eases and inflation turns negative, Dewan Housing Finance Corporation on Friday said it expects home loan rates to come down by 25-50 basis points in the near-term.

"Interest rates will continue to remain low for some time. There is sufficient liquidity in the system. Inflation has also turned negative. My perception is that home loan rates will come down by 25-50 basis points in the near-term," DHFL vice-chairman and managing director Kapil Wadhwan told PTI.

Inflation stood at minus 1.61 per cent, for the first time in thirty years, for the week ended June 6 as compared to 0.13 per cent in the previous week and 11.66 per cent during the corresponding week of last year.

This might prompt the Reserve Bank to cut key policy rates once again. A few bakers have already indicated that they might look at bringing down the interest rate further.

On top of that, there is a mounting pressure from the government as well as the Reserve Bank to lower the interest rate further in order to ensure credit flow for all productive economic activity.

The RBI had reduced the repo and reverse repo rates by 25 basis points each on April 21, 2009.

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