The Hindu Business Line : Parekh sees softening of interest rates

Mumbai, Jan. 12 Interest rates could soften by 25 basis points to 50 basis points if there is no hike in the cash reserve ratio, said Mr Deepak Parekh, Chairman, HDFC Bank, speaking to reporters on the sidelines of the Global Trade & Investment Conference of the Indian Merchants Chamber on Friday.

“India is a resilient economy but it is not completely immune to the global events. These global events will definitely affect us to a certain extent,” he said, addressing the conference.

Mr Parekh said that India may not witness the flood of forex going forward as has been the case in the recent past because investors in India were cashing out and there was lot of redemption in the US.

Sub-prime: IT impact

“We may not be affected as much by the US slowdown and its sub prime crisis as much as some other countries which depend more on exports. But we are certainly not immune from the global events. While none of the Indian banks appear to be affected by it, the IT and BPO sectors could feel the heat as the crisis has impacted IT spends,” said Mr Parekh.

New Investors

He also added that apart from the usual investors we have attracted new groups of investors into our markets. “Indian share markets are seeing fund inflow from new sets of investors. US Pension funds are now investing in our markets and so are Japanese and Western Asian oil companies,” Mr Parekh said.

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