FINANCE TIP OF THE DAY
Can you afford your loan?!
Know the quantity of loan you can afford. The banks may sanction loan based on your income but you should look at your monthly expenditure and see if you can afford the maximum that banks offer. As a thumb rule, remember not to let your credit exceed 40% of your income!
RBI is determined to do a policy review
According to a recent press report the Reserve Bank of India is determined to do policy review in between pause and rise in the Repo rate. Reports said that the RBI has a plan to increase the rates, but the Industry lobbies are against the tightening. The RBI refusal feels that the bank is anxiety in pause the Repo rate. The inflation on a moving pace is going to touch Double Digit.
Reports said that inflation is inflexible and will pressurize the growth of sectors. When the cycle began to tightened, inflation rate is reduced only up to 50 basis points. Core inflation is 7.5 per cent, above historical levels. The increasingly complicated global backdrop and slowing growth have induced several central banks to tone down their hawkishness.
RBI, however, has repeatedly reiterated its focus on domestic developments and the explicit policy priority in containing inflation, even at the cost of near-term growth, if required. So far, RBI stood justified on its cautious view of commodities.
The weakening rupee has actually increased import costs for several commodities. RBI has induced to maintain an extra-vigilant monetary position to avoid the negative impact in the economy due to fiscal policy. RBI has an idea to enter into a pause mode from the policy review in December 2011, as inflation would get reduced till 7 per cent. Inflation in India is more structural rather than what can be contained with cyclical tools like rate increases alone. However, RBI is currently fire-fighting inflation, which is not ready to examine any other options.