New Delhi: The policies made by the Reserve Bank of India can never be of a loose nature to the economy of the country. Markets and borrowers are particularly sensitive this time round. The home loans, car loans and business loans are directly influenced by RBI decision on interest rates.
In case interest rates are raised by RBI, then loans will be costly. This has the ability to slow down expenditure and investment. Conversely, when the rates remain steady or decrease, borrowing becomes easy and individuals consume more.
Currently, inflation and world economies are the priority of RBI. The increase in food and fuel prices compelled the central bank to be cautious. The signals given by RBI are closely followed by investors in order to know the future trend.
The RBI announcements in stock markets are usually quick to react. Share prices can be brought up or down by even the smallest connotations. Borrowers, particularly home borrowers are hoping that the rates would not go higher.
