Interest rate – John Hesch http://johnhesch.com/ Tue, 21 Jun 2022 01:04:26 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://johnhesch.com/wp-content/uploads/2021/07/icon-150x150.png Interest rate – John Hesch http://johnhesch.com/ 32 32 Rising interest rates dampen new car sales in Australia https://johnhesch.com/rising-interest-rates-dampen-new-car-sales-in-australia/ Tue, 21 Jun 2022 01:04:26 +0000 https://johnhesch.com/rising-interest-rates-dampen-new-car-sales-in-australia/ The Reserve Bank’s interest rate may have only increased by half a percent, but it has already eliminated up to 10% of requests for financing in some new car showrooms – and sparked a drop in sales inquiries. 0 See 4 pictures The Reserve Bank’s recent interest rate hike of 0.5% is already being felt […]]]>

The Reserve Bank’s interest rate may have only increased by half a percent, but it has already eliminated up to 10% of requests for financing in some new car showrooms – and sparked a drop in sales inquiries.


The Reserve Bank’s recent interest rate hike of 0.5% is already being felt in new car showrooms across Australia.

Although this is the biggest interest rate hike in 22 years, the new official cash rate of 0.85% is still among the lowest on record.

However, the move has already curbed up to 10% of finance applications at new car showrooms in low-middle income areas across Australia.



And the interest rate shock appears to have rattled new car sales inquiries, with dealers reporting lower foot traffic in June – historically the busiest month of the year – than in may.

In an example at a dealer requested by Conductsix of 50 financing requests for a popular model priced below $40,000 were turned down as interest rates rose as it pushed some borrowers above the threshold to afford repayments comfortably.

Data from accountancy firm Deloitte shows that nearly a third of all new cars sold in Australia are purchased with dealer financing. However, some dealerships claim that up to 50% of their sales are made through their finance office.



The 0.5% interest rate hike announced by the Reserve Bank in the first week of June 2022 – to 0.85% – was above financial analysts’ forecasts.

They had predicted an increase in interest rates of between 0.25 and 0.40%.

The 0.5% rise in interest rates seems to have spooked lenders, who are now preparing for further hikes.



The other rising costs in the process of selling new cars are dealer interest rates.

Most showrooms finance their vehicle inventory once they place an order with the automaker. Essentially, it’s a bridging loan — or fee — to cover the cost of a new car to the dealership before it’s sold to a customer.

Although the wholesale finance rates paid by dealers for their showroom inventory are generally lower than retail interest rates, a number of dealers interviewed by Conduct said the costs of their ‘floor plan’ had risen in the past fortnight since the Reserve Bank’s interest rate hike.



Industry insiders are increasingly of the view that the current period of record dealer profits and limited vehicle availability may soon be coming to an end.

The general consensus of the large multi-franchise networks of new vehicle dealerships canvassed by Conduct is that over the next 12 to 18 months, they expect demand to slow – just as auto factories finally catch up with supply shortages.

“It will be perfect buying conditions in about 12 to 18 months, based on our current estimates, but not so good for dealers,” said a veteran showroom owner.



“Auto factories will finally catch up and demand will falter as some buyers are discouraged by rising interest rates or other economic uncertainties. So we’re likely to end up with a drop in demand right at the when a ton of new cars will start arriving.

“Furthermore, we expect that as interest rates rise, more lenders will begin to reject more requests for financing, as higher interest rates will extend people’s ability to repay a loan. .”

A specialist at car analyst Deloitte said while the accountancy firm monitors dealership finances, it doesn’t know how much finance is being secured outside of dealerships – or what proportion of buyers are paying for new cars with their savings .

Deloitte also says it doesn’t know how many deals “fail” based on lending criteria.

However, anecdotally, up to 10% of dealer financing requests since the interest rate hike have been turned down, according to a number of dealers interviewed by Conduct.

While most new car showrooms have wait times of three to 12 months for most models, supply should improve by this time next year.



At the same time, after more than two years of steady price increases, the RRPs for new cars could eventually come back down – to offset the cost to consumers amid impending interest rate hikes.

Industry experts say that if buyers are looking for a bargain – and can afford to wait – buying conditions should be better in about a year.

Joshua Dowling has been a motoring journalist for over 20 years, spending most of his time working for the Sydney Morning Herald (as motoring editor and an early member of the Drive team) and News Corp Australia. He joined CarAdvice/Drive in late 2018 and was a World Car of the Year judge for 10 years.

Learn more about Joshua Dowling IconLink

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7 Steps to Get the Lowest Personal Loan Interest Rate with Bajaj Finserv https://johnhesch.com/7-steps-to-get-the-lowest-personal-loan-interest-rate-with-bajaj-finserv/ Fri, 17 Jun 2022 12:23:00 +0000 https://johnhesch.com/7-steps-to-get-the-lowest-personal-loan-interest-rate-with-bajaj-finserv/ Here’s how to get an instant personal loan at the lowest interest rates with Bajaj Finserv. A personal loan is a quick and convenient tool for managing various financial needs, especially those that arise without notice. You can use an online personal loan even for planned expenses, such as home renovations, education costs, or even […]]]>

Here’s how to get an instant personal loan at the lowest interest rates with Bajaj Finserv.

A personal loan is a quick and convenient tool for managing various financial needs, especially those that arise without notice. You can use an online personal loan even for planned expenses, such as home renovations, education costs, or even vacations. Sometimes it doesn’t make sense to dip into your savings for some big expense. The perfect way to finance your immediate cash needs is to avail the lowest interest rate personal loan from Bajaj Finserv. Once you’ve determined the amount you need, use an EMI loan calculator to determine your monthly repayments.

Here are 7 steps that will help you get a personal loan at the lowest interest rate from Bajaj Finserv:

1. Clearly define your personal loan need

Before opting for the personal loan at the lowest rate, finalize the amount you need and determine a comfortable monthly repayment amount based on your income. You can even mix and match. For example, if you need an amount of Rs. 4 lakh, but the EMI turns out to be quite high, you can choose to use Rs. 1 lakh from your savings to reduce the loan/EMI amount. The line between a higher loan and saving your savings versus a lower loan and eating into your savings is the one you have to walk alone. If in doubt, use an online loan EMI calculator.

2. Visit Bajaj Finserv website

Once you have a ballpark figure in mind, visit the Bajaj Finserv website and check out personal loan offers online. Bajaj Finserv offers personal loans of up to Rs. 25,000,000. Tenures of lowest interest rate personal loans range from 24 months (2 years) to 60 months (5 years). If you have a good credit score and a solid income, you can get the most competitive interest rate on your personal loan online. Interest rates generally start at around 13%. Again, enter all of your loan information into an EMI Loan Calculator to better understand the offer.

3. Check the eligibility of your personal loan

Unless you meet all the eligibility criteria, it is difficult to get the personal loan at the lowest interest rate. Before applying for a personal loan online from Bajaj Finserv, go through their portal for information on eligibility criteria such as age, minimum monthly income, credit score, and work experience. You should always keep all the required documents handy before applying for a personal loan. A higher credit score will allow you to get the lowest interest rates on your personal loan, no matter which lending institution you approach.

4. Maintain a high CIBIL score

Your CIBIL score is an indicator of your repayment history. A CIBIL score of over 750 is considered the most favorable by banks and financial institutions, and applicants with these scores are sure to get the personal loans at the lowest rates without too much trouble. Even if your credit score is north of 700, you have a decent chance of qualifying for a competitive personal loan offer, but below 700 is where things get tricky. We suggest making all your credit card/loan payments on time to establish an impressive credit score before applying for a new loan.

5. Compare interest rates online

If you meet all the eligibility criteria and have a credit score above 750, you can get a personal loan online from Bajaj Finserv at an interest rate of just 13%. However, the interest rate can also go up if your ability to repay is questionable. Using a Loan EMI Calculator, you can better understand loan variables (such as interest rate and term) and how they affect your repayment obligation.

6. Complete the personal loan application form

Once you are satisfied with the online personal loan details available on the Bajaj Finserv website, you can start the application process by completing the online form. Along with KYC details like Aadhaar and PAN Card, you also need to provide your income data along with relevant documents like payslips and bank statements. Make sure you enter all the details correctly and submit electronic copies if required. The online application process is simple and transparent, and you can do it in a very short time. Upon submission, you will receive an OTP to your registered mobile number. Once you have entered the OTP, your request is saved and being processed.

7. Get quick disbursement of funds

Your Bajaj Finserv personal loan application is usually processed within a short period of time. However, if your documentation is correct and you meet all the eligibility criteria, you can get the loan amount disbursed in just a few hours.

Taking the lowest interest rate personal loan to manage your personal finances or consolidate your debts is probably the best financial decision you can make. Indeed, personal loans are disbursed quickly and do not require you to keep collateral as collateral. However, there are some factors you should be aware of, such as your credit score, as having a minimum credit score of 750 is a must to get a personal loan online. Keep these factors in mind and you won’t have to face any problems by opting for the personal loan with the lowest interest rate.

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CommBank – Signs of slowing household spending after interest rate hike https://johnhesch.com/commbank-signs-of-slowing-household-spending-after-interest-rate-hike/ Wed, 15 Jun 2022 08:05:08 +0000 https://johnhesch.com/commbank-signs-of-slowing-household-spending-after-interest-rate-hike/ The CommBank HSI is up in May across most categories, but discretionary spending is starting to ease as the cost of living rises. Consumer spending intentions as measured by the CommBank Household Spending Intentions Index rose 2.9% in May to 115.9, although discretionary spending appears to be slowing after recent rate hikes. The index – […]]]>

The CommBank HSI is up in May across most categories, but discretionary spending is starting to ease as the cost of living rises.

Consumer spending intentions as measured by the CommBank Household Spending Intentions Index rose 2.9% in May to 115.9, although discretionary spending appears to be slowing after recent rate hikes.

The index – which combines Commonwealth Bank of Australia (CBA) payments data and Google Trends search insights – regained ground after falling in April, with increases in seven of its 12 categories in May, including home buying, fitness and health and transport, along with lower spending on entertainment, travel and insurance.

Rising home loan applications and housing searches on Google led to an increase in home purchase spending intentions of 14.8%, down 3.3% from May 2021 and 13 percent below their peak in March 2021. The decline in auction lending and settlement rates in May will likely accelerate due to recent increases in cash rates by the Reserve Bank of Australia.

More Aussies on the move and higher gasoline prices drove transportation spending intentions, rising 11.7% in the month and 70.1% on May 2021. Spending intentions for health and fitness rose 12.8% in May, up 7.3% on the year.

Travel spending intentions fell 1.5% in May after hitting a post-COVID peak in April, but remain 52.3% higher May 2021. A decline in travel-related transactions and Google searches was no surprise after a busy holiday season in April, which also explains a 4.1% drop in entertainment spending intentions in May.

ABC Senior Economist Belinda Allen said consumer spending patterns continued to shift post-COVID and showed signs of slowing in response to higher interest rates and after incredible momentum following the easing of pandemic restrictions in late 2021.

“Household spending intentions rebounded in May after falling in April due to the number of public holidays. Given this seasonal volatility, the annual change in the CommBank HSI best reflects the state of our economy and is up 7.9% on the year – albeit due to higher prices rather than larger volumes,” she said.

“Rising prices and rising interest rates will have an impact on household spending. We see early indicators of weakness in the ABC’s credit and debit card spending data, with discretionary spending on recreation, clothing and footwear, and household furnishings and equipment down slightly and increased spending on food and drink from a peak.

“The RBA’s rate hike cycle is more aggressive than expected and we have revised our interest rate forecast up, as well as downgraded our outlook for economic growth and our forecast for house prices,” Mrs. Allen said.

The ABC’s economics team has revised its forecast following the larger-than-expected rise in the exchange rate last week. The team raised its cash rate target to 2.10% from 1.60% by the end of 2022, cut its GDP growth forecast for 2022 to 3.5% from 4.7% and expects national house prices to drop about 15%. by the end of 2023.

The CommBank HSI Index combines analysis of payments data from the ABC (australia largest consumer spending dataset covering approximately 40% of payment transactions), loan application information, and publicly available Google Trends search activity data. To access this powerful insight into spending trends, visit www.commbank.com.au/hsi

Index of household spending intentions – June 2022

What you need to know

The information in this press release is for informational purposes only and provides general market information, and is not intended to be an investment research report. This press release has been prepared without taking into account your objectives, financial situation (including ability to bear a loss), knowledge, experience or needs. Before acting on the basis of the information contained in this press release, you should evaluate its appropriateness and, if necessary, seek appropriate professional or financial advice, including tax and legal advice. The data used in this press release is a combination of “CBA transaction data” and Google Trends data. Google Trends is a registered trademark of Google LLC. The term “CBA Transaction Data” refers to the proprietary data of the Commonwealth Bank of Australia (“the Bank”) that originates from the Bank’s internal systems and may include, but is not limited to, credit card transaction data, merchant institution transaction data and credit applications. All client data used or depicted in this press release is anonymized and aggregated before analysis, and is used and disclosed in accordance with the Bank’s Privacy Policy Statement. The Bank takes reasonable steps to ensure that its proprietary data is accurate and that all opinions, conclusions or recommendations are reasonably held or made at the time of compiling this press release. As the statistics only reflect data from the Bank, no representations or warranties are made as to the completeness of the data and they may not reflect all market trends.

Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945.

Key words

Household spending Coronavirus Economy

Get in touch

Journalists can email media@cba.com.au or call us on +61 2 9118 6919

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Interest rate hikes are a blunt but dangerous weapon in… https://johnhesch.com/interest-rate-hikes-are-a-blunt-but-dangerous-weapon-in/ Mon, 13 Jun 2022 18:06:04 +0000 https://johnhesch.com/interest-rate-hikes-are-a-blunt-but-dangerous-weapon-in/ (MENAFN – ValueWalk) kreatikar / Pixabay Interest rate hikes are a ‘brutal but dangerous weapon’ in the fight against searing inflation, which is hitting low-income households the hardest, warns the CEO of one of the largest independent financial advisory organisations, asset management and fintech companies in the world. The warning from deVere Group’s Nigel Green […]]]>

(MENAFN – ValueWalk)

kreatikar / Pixabay

Interest rate hikes are a ‘brutal but dangerous weapon’ in the fight against searing inflation, which is hitting low-income households the hardest, warns the CEO of one of the largest independent financial advisory organisations, asset management and fintech companies in the world.

The warning from deVere Group’s Nigel Green comes as the average global inflation rate hits 7.4%.

In the United States, the United Kingdom and Germany, inflation has reached its highest rate for 40 years. Consumer price growth has even started to soar across Asia, a region that until recently had largely managed to avoid the broad global trend.

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Inflation in Latin America’s largest economies is the highest in 15 years; the overall rate in sub-Saharan Africa is expected to reach 12.2% this year; the Netherlands has almost tripled this year to 9.2%; and Australia’s doubled to 5.3%.

Nigel Green says: “Inflation is a serious global problem. Fears of a return to the chronic inflation and recessionary landscapes of the 1970s are real.

Interest rate hikes are a blunt weapon

“In an attempt to combat the scourge of soaring prices, central banks around the world are raising interest rates. The theory goes that when interest rates are higher, less money will be spent. When less money is spent, the prices of consumer goods increase more slowly.

“But rising interest rates are a blunt weapon in this fight.

“Rising borrowing costs can do little to combat inflation triggers on the supply side of economies, such as unprecedented shipping backlogs or shortages of materials and labor. labor, the Covid lockdowns in China and the war in Ukraine.”

He continues: “Raising interest rates to fight inflation is also a dangerous weapon.

“Inflation hits low- and middle-income families up to a third harder than the wealthiest, research shows, because they have to spend a greater proportion of their income on essentials such as food and electricity. energy.”

Clearly, something must be done to protect the poorest families from the worst effects of rising prices.

“However, raising interest rates may not be the solution? Why? Because low-income households are most likely to have credit – and higher interest rates mean higher borrowing costs,” says deVere Group CEO.

“Furthermore, it intentionally slows the economy, which could then trigger a recession and hamper business efforts to invest and create jobs, which, again, would have a greater negative financial impact on the poorest families. poor.” Nigel Green concludes: “The most effective weapons in the fight against inflation are not within the purview of central banks.

“The best measures are to get a conclusive international grip on the pandemic, stop the war in Ukraine, fix supply chain issues and dramatically increase green energy production – energy demand is only expected to increase. that over time and rising interest rates will not be enough to dampen demand.

About the deVere Group

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions for international, high net worth and high net worth clients. It has a network of over 70 offices around the world, over 80,000 clients and $12 billion under advisory.

Updated on June 13, 2022 at 10:09 a.m.

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Student loan interest rate to be capped at 7.3% in autumn, says DfE | Students https://johnhesch.com/student-loan-interest-rate-to-be-capped-at-7-3-in-autumn-says-dfe-students/ Sat, 11 Jun 2022 08:28:00 +0000 https://johnhesch.com/student-loan-interest-rate-to-be-capped-at-7-3-in-autumn-says-dfe-students/ Ministers intervened to reduce a sharp rise in interest rates on student loans, after the recent rise in inflation meant rates would triple for many graduates by autumn. The Department for Education said the maximum rate from September was to be set at 7.3% instead of the 12% it would have reached in September, based […]]]>

Ministers intervened to reduce a sharp rise in interest rates on student loans, after the recent rise in inflation meant rates would triple for many graduates by autumn.

The Department for Education said the maximum rate from September was to be set at 7.3% instead of the 12% it would have reached in September, based on earlier inflation figures plus 3%.

The DfE said the change meant the accrued interest of a borrower in England and Wales with a student loan balance of £45,000 would fall by around £180 a month, down from 12% interest rate .

Capping the maximum rate will primarily benefit wealthier graduates, according to the Institute for Fiscal Studies (IFS), as they are more likely to repay their entire loan within 30 years of graduation. Other graduates have any outstanding balance after 30 years.

The maximum interest rate is currently charged on loans to graduates earning more than £49,000 a year, but the change to the DfE means all graduates will be charged the same 7.3% – which is a steep increase on to the current 1.5% charged on loans from those earning £27,000 or less.

Michelle Donelan, Minister for Universities for England, said: “I want to reassure that this does not change the monthly repayment amount for borrowers, and we have brought this announcement forward to provide more clarity and peace of mind for graduates. .”

Monthly student loan repayments are based on income rather than interest rates or the amount borrowed. Graduates pay 9% of their earnings above a reimbursement threshold of £27,295 per year.

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IFS’ Ben Waltmann said: ‘We said in April that the current student loan interest rate policy was deeply flawed and would lead to a rollercoaster of interest rates for graduates. It is great to see that, as we have suggested, the government has decided to act to avoid the roller coaster.

“However, for most graduates, this announcement will have little or no effect on their refunds. Most of those with undergraduate loans will probably never repay their loans in full, so the interest rate never affects their repayments.

But Larissa Kennedy, the president of the National Union of Students UK, said the new rates would still be “crucially high” for many graduates.

“Ministers should prioritize providing urgent cost-of-living assistance here and now. We hear from students who can’t even afford to keep taking the bus,” she said.

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ECB braces for first interest rate hike in a decade https://johnhesch.com/ecb-braces-for-first-interest-rate-hike-in-a-decade/ Thu, 09 Jun 2022 17:42:09 +0000 https://johnhesch.com/ecb-braces-for-first-interest-rate-hike-in-a-decade/ Right now the central bank deposit rate, which is what banks get for depositing money with the central bank overnight, is minus 0.5%, effectively a penalty intended to encourage banks to lend money rather than keep it at the central bank. The rate was first brought below zero in mid-2014 when the inflation rate fell […]]]>

Right now the central bank deposit rate, which is what banks get for depositing money with the central bank overnight, is minus 0.5%, effectively a penalty intended to encourage banks to lend money rather than keep it at the central bank. The rate was first brought below zero in mid-2014 when the inflation rate fell towards zero.

“The European Central Bank is finally taking the fight against inflation risks seriously,” wrote Holger Schmieding, Berenberg Bank’s chief economist, in a note to clients, adding that the central bank has taken a “harder line ” provided that.

Equities in Europe fell, with the Stoxx Europe 600 index closing down 1.3%. Even though traders had bet on several interest rate hikes this year, government bonds also sold off, pushing up their yields, which are a measure of borrowing costs. The euro fell against the dollar.

But not all analysts agreed that the bank was doing enough. Commerzbank analysts wrote that policymakers were “acting too hesitantly” and that inflation would on average be “well above target” in coming years.

Valentin Marinov, a currency strategist at Credit Agricole, said the bank’s focus had shifted to tightening monetary policy and away from ensuring “favourable financial conditions”, a shift that weighed on investors. euro-denominated assets. The change could also “add to market concerns about the euro zone’s growth outlook”, he said.

The central bank updated its forecast for the economy on Thursday, painting a grim picture of rising inflation and deteriorating growth prospects as war in Ukraine disrupts trade and pushes oil prices energy and raw materials on the rise. Inflation also squeezes incomes, which weighs on consumer confidence.

The war “severely affects the economy of the euro zone, and the outlook is still surrounded by great uncertainty”, said Ms. Lagarde. At the same time, China’s zero Covid policy is restricting manufacturing and exacerbating supply bottlenecks. “As a result, companies face higher costs and disruptions in their supply chains, and their prospects for future production have deteriorated,” she said.

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RBI expected to raise interest rates by 25-50 basis points today: experts https://johnhesch.com/rbi-expected-to-raise-interest-rates-by-25-50-basis-points-today-experts/ Wed, 08 Jun 2022 01:35:00 +0000 https://johnhesch.com/rbi-expected-to-raise-interest-rates-by-25-50-basis-points-today-experts/ The Reserve Bank of India (RBI) is expected to raise its key rate by 25 to 50 basis points on Wednesday as inflation continues to remain above its comfort level, experts said. Last month, RBI raised the repo rate or short-term lending rate by 40 basis points as part of an off-cycle monetary policy […]]]>

The Reserve Bank of India (RBI) is expected to raise its key rate by 25 to 50 basis points on Wednesday as inflation continues to remain above its comfort level, experts said.

Last month, RBI raised the repo rate or short-term lending rate by 40 basis points as part of an off-cycle monetary policy review to control spiraling inflation.

The decision by the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das, which started its deliberations on Monday, is expected to be announced at 10 a.m. on Wednesday.

Das has already indicated that there could be another hike in the repo rate although he refrained from quantifying it.

Inflation based on the Consumer Price Index (CPI), which RBI takes into account when formulating its monetary policy, has been on the rise since October 2021.

Retail price inflation has remained above RBI’s upper tolerance level of 6% since January. It had hit an 8-year high of 7.79% in April, topping the RBI’s tolerance band for inflation of 2% to 6% for a fourth consecutive month. Inflation is expected to remain high in the near future.

The government has instructed the central bank to ensure that retail price inflation remains at 4% with a 2% margin on either side.

A report from HDFC Bank’s Treasury Research Office said RBI is expected to raise the policy rate by 25 basis points while continuing to hold its position and the CRR rate unchanged.

“We’re leaning towards a 25 basis point rate hike instead of 50 basis points because we don’t see a compelling case for a larger rate hike at this point,” he said.

He expects RBI to change the inflation forecast by 70 to 80 basis points from 5.7% earlier, citing changing global and domestic price pressures.

Indranil Pan, chief economist at Yes Bank, said the inflation surprise highlighted the need for the RBI to tighten monetary policy.

“We see RBI extending its 40bps repo hike from May with a 35bps increase in June, followed by 25bps each in August and September. world will have slowed down enough to drive down commodity prices and thus also provide some comfort to the domestic inflation cycle,” he said.

Saransh Trehan, managing director of the Trehan Group, estimated that RBI is likely to raise policy rates by up to 50 basis points.

The banks will eventually pass it on to the borrowers. However, given historically low interest rates, this will not have a significant impact on demand, he said.

“We expect the policy rate to increase by 35 to 50 basis points. RBI is however likely to provide ongoing liquidity support through the LAF window to support the growth process. government borrowing while controlling yield tightening through policy twists,” credit rating agency Infomerics said.

Analysts also expect the RBI to reduce liquidity, step up its fight against inflation and expand its efforts to bring monetary conditions back to where they were before the pandemic prompted sweeping action to boost the economy.

“We see the RBI continuing with measures to absorb liquidity,” BofA Global Research said in a June 3 note, predicting a 50 basis point increase in the cash reserve ratio (CRR) for banks, which would absorb around Rs 87,000 crore. in the banking system.

Anand Nevatia, fund manager at Trust Mutual Fund, said that with RBI now prioritizing inflation targeting over growth, “we expect rates to rise by 35 to 50 basis points as well as a hike of the CRR to reduce liquidity”.

The government has instructed RBI to ensure that CPI-based inflation remains at 4% with a 2% margin on either side.

Last month, MPC raised the key repo rate by 40 basis points to 4.4% to rein in rising inflation. It was the first rate hike after August 2018.

In a bid to cushion the impact of the lockdown, RBI had cut the repo rate by 75 basis points to 4.40% on March 27, 2020 from 5.15%.

On May 22, 2020, RBI again cut the repo rate by 40 basis points and lowered it to 4%. Thereafter, it maintained the status quo of the reference interest rate for almost two years before increasing it on May 4, 2022.

“A rise at the RBI policy meeting this week…is a foregone conclusion,” said Radhika Rao, senior economist at DBS Bank.

“Inflation has been consistently high over the past three years, even as the drivers have changed – from supply bottlenecks to staples and reopening pressures,” she added. .

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‘Mera Gold Loan, Mera Interest*’ – Choose your interest rate on your Gold Loan only with Muthoot FinCorp https://johnhesch.com/mera-gold-loan-mera-interest-choose-your-interest-rate-on-your-gold-loan-only-with-muthoot-fincorp/ Mon, 06 Jun 2022 07:48:00 +0000 https://johnhesch.com/mera-gold-loan-mera-interest-choose-your-interest-rate-on-your-gold-loan-only-with-muthoot-fincorp/ Muthoot FinCorp, a pioneer in gold lending in India, has introduced another innovative program, “Mera Gold Loan, Mera Interest*”. The program is designed to help clients better plan their finances and improve their livelihoods. Customers can now exercise their freedom in choosing the interest rate for their gold loan. The company began operations in 1887 […]]]>

Muthoot FinCorp, a pioneer in gold lending in India, has introduced another innovative program, “Mera Gold Loan, Mera Interest*”. The program is designed to help clients better plan their finances and improve their livelihoods. Customers can now exercise their freedom in choosing the interest rate for their gold loan.

The company began operations in 1887 and has always worked to help the common man improve his financial well-being. They have worked to make getting a loan quick and easy. Today, customers can get a gold loan approved instantly, without a credit check or proof of income. Under Muthoot FinCorp’s new program, clients will benefit from faster processing and approvals, as well as flexible repayment terms when apply for a gold loan. The company offers many gold loan programs to meet different financial needs. These range from medical emergencies, business investments, weddings, travel plans to school fees, etc.

Any borrower between 18 years old (when applying for the loan) and 65 years old (when the term ends) can get the gold loan ranging from INR 1500 to 50 lacs approved instantly. Walk into a Muthoot FinCorp branch near you to get the loan. Don’t forget to carry KYC documents. A customer service representative will help you pawn the gold and get out of the branch with instant money in less than 10 minutes – this is subject to terms and conditions. There is no need for multiple visits and a borrower can apply for multiple loans. Consider nominal processing fees when pledging gold.

Muthoot FinCorp is a popular NBFC with people from different sections of society. Customers don’t have to worry about their gold. The company uses high-end, maximum-security, wholly-owned facilities to store the gold, not a third-party locker. If you’re facing a financial crisis, it’s time to head to a Muthoot FinCorp near you and get the loan to meet your unique financial needs.

About Muthoot FinCorp: It is the flagship company of the Muthoot Pappachan or Muthoot Blue group. They have taken over 134 years of heritage to empower millions of Indians. Inherited values ​​and principles enable them to serve 100,000 customers a day through a range of financial products and services. Apart from Gold Loan, other NBFC offerings include Small Business Loans, Two-wheeler Loans, Used Car Loans, Affordable Housing Loans, Foreign Currency, International Remittances, domestic money transfers, insurance products and services, wealth management services and more. Each branch of the company is similar to a financial supermarket, allowing customer service representatives to help each customer meet their needs under one roof.

“This is a company press release that is not part of the editorial content. No journalist from The Hindu was involved in the publication of this press release.

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The interest rate support program has little effect on the stock market https://johnhesch.com/the-interest-rate-support-program-has-little-effect-on-the-stock-market/ Sat, 04 Jun 2022 04:42:00 +0000 https://johnhesch.com/the-interest-rate-support-program-has-little-effect-on-the-stock-market/ VIETNAM, June 4 – A group of brokers and investors are looking at the stock market. Photo vietnamnet.vn HÀ NỘI — Since the securities and real estate sectors are not on the list of recipients of support, the positive effects of the 2% interest rate support program on the stock market are not not important. […]]]>

VIETNAM, June 4 – A group of brokers and investors are looking at the stock market. Photo vietnamnet.vn

HÀ NỘI — Since the securities and real estate sectors are not on the list of recipients of support, the positive effects of the 2% interest rate support program on the stock market are not not important.

The government officially issued a decree on subsidizing interest rates on loans to enterprises, cooperatives and commercial households on May 20.

The application period is in 2020 and 2023, or the package may end earlier when the total loans with interest rate subsidy reach approximately 40 trillion VNĐ ($1.7 billion).

After the market’s benchmark VN index plunged 24% from its nearly two-month high, falling from 1,524 points to 1,150 points, the announcement of the 2 % is a lifeline for the market on expectations of cash flow return.

In fact, the index had experienced exceptional recoveries for two weeks with gains of almost 150 points. There are growing expectations of the cheap cash flow created from the package worth VNĐ40 trillion, which is equivalent to preferential credit of up to VNĐ1 quadrillion.

However, experts said that this package only has indirect effects on the stock market. Therefore, investors should not expect strong market performance after the package is issued.

On the bright side, Agribank Securities Corporation (Agriseco) said this support package is expected to give businesses a boost to accelerate their speed of recovery, contributing to overall economic growth to meet the government’s target of 6 at 6.5%. But if companies spend government-backed capital for the wrong purpose, it can lead to undesirable outcomes for the economy.

Right after the support announcement, many feared the interest rate package would bring back to the stock market what happened in 2009.

Experts from Agriseco said that 13 years ago, Việt Nam also set up an interest rate support program with the State Bank of Việt Nam (SBV) and applied for loans from short, medium and long term. This policy was part of the fiscal and monetary policies aimed at stimulating the economy which was affected by the global crisis.

The interest rate on the envelope was 4% per year in 2009 and was reduced to 2% per year in 2010 for medium and long-term loans.

After the package was implemented, from 2009 to 2011, speculative cash flows flowed into asset markets such as gold, foreign exchange and real estate, increasing pressure on inflation ever since. 2010. The consumer price index (CPI) rose by 9.19 and 18.58%. year-on-year in 2010 and 2011, respectively.

In the stock market, the VN-Index showed an impressive gain from 230 points to almost 500 points, an increase of more than 100 percent in 2009, with the first appearance of speculative cash flow in the stock market when the interest rate for production and commercial activities gradually decreased.

However, the market was on a downtrend for the next two years. In 2011 alone, the VN index and the HNX index fell more than 25% and nearly 50% from the start of the year, respectively, with average liquidity up to 60%.

At the moment, Agriseco expected the interest rate support program to have positive but not too strong effects on the stock market, as the market size is now much larger than in 2009. Specifically, the market capitalization at the end of 2009 was VNĐ 620 trillion. , accounting for 45% of GDP, while the value at the end of 2021 reached almost VNĐ 5.8 quadrillion, reaching almost 93% of GDP.

“We also believe market growth is being driven by improving business results and internal corporate strength, rather than speculative cash flow,” Agriseco said.

According to the securities company, there are two subjects benefiting from the policy, which are the banks and the companies operating in the supported sectors.

Business sectors on the support list include aviation, tourism, agriculture, marine products and manufacturing industries. Leading companies in these industries are more likely to meet the standards of the package because their resistance to the pandemic is better than others. —VNS

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Fed Vice Chairman Says Another Big Interest Rate Hike Could Happen in September https://johnhesch.com/fed-vice-chairman-says-another-big-interest-rate-hike-could-happen-in-september/ Thu, 02 Jun 2022 18:05:18 +0000 https://johnhesch.com/fed-vice-chairman-says-another-big-interest-rate-hike-could-happen-in-september/ Lael Brainard, vice chairman of the Federal Reserve, suggested on Thursday that the central bank could make another big rate hike in September and threw cold water on the idea that policymakers could suspend interest rate moves. rates after the summer – signaling instead that they are intensely focused on controlling too-high inflation. Ms. Brainard, […]]]>

Lael Brainard, vice chairman of the Federal Reserve, suggested on Thursday that the central bank could make another big rate hike in September and threw cold water on the idea that policymakers could suspend interest rate moves. rates after the summer – signaling instead that they are intensely focused on controlling too-high inflation.

Ms. Brainard, in an interview on CNBC, said market expectations for half-percentage-point increases in June and July, increases that would be twice as large as the Fed’s typical, seemed “reasonable. “. She doesn’t know where the economy will be in September, she said, but explained that if inflation remains rapid, another big move “may well be appropriate.” If it slows down, a lower rate of increase might make sense.

She added, however, that it was “hard to see the case for a pause” at a time when the Fed had “a lot of work to do” to bring inflation back to its target of 2% in average over time. Prices rose 6.3% on an aggregate basis and 4.9% on a base basis in the year to April.

Fed officials are battling the fastest rate of inflation since the 1980s by raising borrowing costs, which slows consumer and business demand, helping restore economic balance. Central bankers began trimming their bond balance sheets this week and have already raised their key policy interest rate by 0.75 percentage points since March, efforts that are already making mortgages and other loans more expensive.

“We expect to see some cooling of a very, very strong economy over time,” Ms. Brainard said, explaining that the Fed is seeking moderation and “better balance” in the labor market.

Ms Brainard said she was looking for “a decelerating inflation data set” to feel more confident that inflation would not return to a more sustainable path.

The Fed is evolving in a difficult context. Ms Brainard said there was a “good dose of uncertainty” about the economy, citing Russia’s war in Ukraine and lockdowns in China as factors clouding the outlook.

Economists have warned that the Fed could struggle to slow the economy without tipping it into an outright recession, especially as it withdraws support quickly and in tandem with other central banks around the world. . But Ms Brainard said there was a path where demand could cool and inflation could drop as the labor market remained strong.

“We are starting from a position of strength – the economy has a lot of momentum,” she said, also citing strong balance sheets for businesses and households.

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