HDFC increases lending rates by 20 basis points after RBI’s hike

Daniel Fowler
August 3, 2018

The rate rise decision followed a unanimous 9-0 vote of the Bank's Monetary Policy Committee, chaired by governor Mark Carney.

The Reserve Bank of India (RBI) today hiked the repo rates, or interest rates at which the country's central bank lends money to banks. The banking regulator hiked the repo rate by 25 basis points in June and increased it further to 6.50 per cent while the reverse repo rate was also hiked by 25 basis points to 6.25 per cent on Wednesday.

The Bank of England has raised interest rates to the highest level since 2009 - but what does that mean for your household?

Sterlingis trading at the day's low despite the Bank of England voting 9-0 for a 0.25% interest rate hike at today's MPC meeting.

So there is no direct link to the Bank rate.

In a blow to savers, the Bank said that it would be many years before rates in Britain returned to the long-term trend before the financial crisis hit, when the figure was 5 per cent. Five of the six members on the rate panel voted in favour of a rate increase.

The projected inflation rate is above its targeted comfort level of four per cent.

"The Committee also judges that, were the economy to continue to develop broadly in line with its Inflation Report projections, an ongoing tightening of monetary policy over the forecast period would be appropriate to return inflation sustainably to the 2% target at a conventional horizon", reads a statement issued by the Monetary Policy Committee.

India vs England 1st Test Match Preview and Live Streaming
Buttler is in the form of his life, having scored five consecutive half-centuries in the IPL before those Tests against Pakistan. They just have a different mentality, a winning mentality in every game and the consistency to do that.

Here's Brooks one last time: "Earlier this year the BOE Governor Mark Carney said that the Bank would give its view on the latest equilibrium, or neutral, interest rate for the United Kingdom economy".

Bank deposits at Rs 114.8 lakh crore grew by 0.5 percent during April 1- July 18 compared with a contraction of (-) 1.5 percent growth in the corresponding period previous year.

Image copyright Getty Images Luis asks: What is the reason for increasing interest rates when the economy has a slowdown? "If an R* of 1.5% is confirmed by the BOE, then it would suggest another three rate hikes are likely in the next 3 years".

However, it may be the case that when it comes to renewing that mortgage, the new fixed deals on offer - or the default variable mortgage rate that your deal reverts to - may have become a little more expensive. However, almost 70% of homebuyers now have fixed rate mortgages so will be unaffected.

The Bank of England has raised interest rates to the highest level in nearly a decade.

This has driven the prices of fuel - the biggest item on India's import bill - to record highs at a time the rupee is testing new life lows, raising the threat of imported inflation.

"Regardless of whether their rate increases or not, savers should use this latest rise to assess their options and ensure that, at the very least, their account pays more than base rate".

EUR/GBP at 0.90 gives a GBP/EUR exchange rate of 1.11.

Other reports by

Discuss This Article