Tuesday, February 5, 2013

NTPC stake sale and HDFC’s reduction of floating interest rates!

Good news is an indication of further good news! With the government selling stake in NTPC, inflow of foreign funds saw a rise. The sale was executed, towards raising about $2 billion, in an effort to raise funds. The raised amount would be used to meet its fiscal deficit target. This event saw the rupee strengthening to its highest closing level in three-and-a-half months.

With the NTPC stake sale, the rupee would have gained further had not domestic shares weakened and oil importers had not demanded for the greenback.

Another event worth mentioning is India's biggest housing finance company, Housing Development Finance Corporation (HDFC), announcing its move to reduce its prime lending rate by 10 basis points.

The bank’s floating interest rates are high and this move would reduce the same:
· For loans of up to 3 million rupees - 10.15 percent reduction
· For loans of more than 3 million rupees - 10.40 percent reduction.

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