Rates may tighten further: Assocham survey

NEW DELHI: According to a survey by industry body Assocham, CEOs of various companies feel that RBI would take further measures to tighten the monetary flow as the credit growth continues to remain much above 20 per cent desired by the central bank. The heads of real estates, housing finance and automobile companies who were surveyed, said that there is a possibility of another hike in the cash reserve ratio and repo rates.

Eighty five per cent respondents to the survey feel that RBI would tighten the flow of credit in real estates as this sector has witnessed maximum increase in prices. Other sectors such as construction, automobiles and banks would also be affected by the hike in interest rates, the survey said. Sixty per cent of the 150 corporate heads and economists across different sectors were not sure whether the interest rates have peaked and RBI would not be tempted to further tighten the money supply. However, 40 per cent respondents felt that interest has already touched a peak. — ENS