FD rates likely to go up
Though the Reserve Bank of India (RBI's ) recent credit policy didn't have much for the markets to cheer, there are indications of a rising interest rate regime which should be good news for those relying on fixed deposits.
The central bank has indicated that rates could tighten up in the coming days and the real impact could be felt in the first quarter of the next year.
The year 2009 has been one of the interesting years in interest rate cycles with the rates coming under central banks' scrutiny throughout the year. While the stimulus packages for the revival of financial markets pushed down the rates to near zero levels in most economies, the rate fall was not significant in the case of the domestic market.
In fact, the domestic deposit rates fell only by a couple of percentage points during the first half of the current year. The government's aggressive borrowing has to a great extent stalled the fall and this is reflected in the poor performance of income funds.
POSTED BY:-
SHILPI KUMARI
PGDM-3rd SEM
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