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Just two things which are interrelated
- Current account deficit
which in turn depends on trade imbalance and capital account spending (= corruption and nepotism)CommentQuote0Flag
- I understand inflation .. but whats up with growth?CommentQuote0Flag
1. Inflation (0 in USA, 10% in India)
2. Currency risk (of depreciation of INR)
3. By growth he means low growth in USA and high growth in India which causes the inflation differentialCommentQuote0Flag
- And I thought it should be other way around ! If there is a growth potential govt should help by cutting interest rates so it becomes more affordable for more people .. may be I am wrong here too !CommentQuote0Flag
More growth in India is leading to more imports such as crude, gold, electronic items etc. This is putting pressure on rupee. By keeping high intrest rates to attract foreign capital the rupee is finding difficult to stabalise at 54/55.CommentQuote0Flag
- you will see similar difference in deposit rates also (greater in india and very low in US)...the same funda applies!!CommentQuote0Flag
- In US you can also get home loan for 80 yearsCommentQuote0Flag
- Originally Posted by investor101you will see similar difference in deposit rates also (greater in india and very low in US)...the same funda applies!!
I agree on that.. Saving's interest rate is pathetic here !
But I am not sure if mortgage terms are actually up to 80 years.. what is the max term in India? 30 years I guess?
Any idea if the interest rates are going down in India anytime soon?CommentQuote0Flag
- Dollar is a world reserve currency. Rupee is not. So lot of countries buy dollar bond. That keep interest rate down. Also debt securitization and other financial instrument keep interest rate down in US.CommentQuote0Flag
- I think it is bit logical atleast at this stage -- you cant hv super high interest rate in a ccy which is world reserve ccy else ppl would crowd in n reduce interest rates
As for india .. foreign investors demand higher yield for investing in a country visibly filled with corruption, nepotism (i m not saying US is free of these things).
As for my outlook, though still bearish on rupee for short term, my view wud gradually change if modi comes to powe nxt yr .. if that happens n you see more development being done in india like gujarat, then rupee wud be in demand n subsequently interest rates wud decline .. but this wud b a slow gradual process ..CommentQuote0Flag
- Yes, legal system is also important. In US if you dont pay mortage for 90 days or so , the property goes into foreclosure. India legal system is a mess. So for lender US system is less risky. Also the debt rating agency are from US.CommentQuote0Flag
- India mein inflation 10%+
private sector mein koi hike nahi
pata nahi log home loan kaise chukate hain
us mein inflation near 0%
private sector mein sab job outsourced
isiliye loan lene ki kisi ki himmat nahiCommentQuote0Flag
- I guess sub currency value ka khel hai.. USD is very strong given that EURO zone is again falling in recessions ( it may be mild one but still). I hope it does not mean more interest rate in India.
In India everyone is having black money so they just convert black into white through loans... Regular guys with no black are the ones who suffer. I really do hope that congress goes out and whoever comes does something for remove corruptionCommentQuote0Flag