Interest rates have peaked: HDFC

Mortgage leader HDFC's Managing Director Renu Sud Karnad today said interest rates have peaked and there is little possibility of further rate hike.

"I think interest rates have almost reached peak," Karnad said after launching women exclusive credit cards of HDFC Bank here.

The Reserve Bank of India (RBI) had last month raised the repo rate by 25 basis points to 8.50% and the reverse repo rate moved up by a similar percentage to 7.50%.

Repo is the short-term rate at which the Reserve Bank of India lends to banks, while reverse repo is the rate at which it gets funds from banks.

This is the 13th time the central bank has increased interest rates since March, 2010, to tame inflation, which is hovering near the 10%-mark.

Meanwhile, India's economic growth rate slipped to 6.9% in the second quarter this fiscal, the lowest in nine quarters, prompting the government to lower its full-year growth projection to 7.3%.

Karnad said sales in the housing sector are temporarily down in 3-4 cities because prices have escalated very much.

"Sales are down in high-end segment were people are waiting and watching," she said.

On easing of housing prices, she said, if correction will take place, it will happen in Mumbai, Delhi and some parts of Bangalore.

There could be correction of 10-15% in some areas, she added.

Source: Business Standard