Interest Rate Forecast

Does anybody have a clear idea of the trend of interest rates. I have some funds which I got at 14% fixed to settle one my loans which I am currently paying 14% floating both 5 years term, I was thinking to deposit this in a FD at 11% - 12% and to invest some in the CSE, if the trend becomes good.

because if the rates become lower I could settle the fix interest loan and if the rates become high, I could settle the floating interest loan and have a short term benefit.

what I want to know is

will the rates go up short term - lets say next six months and up to what %

What will the rates be in 1 to 2 years

I know it would be difficult to predict 100% correctly, but someone can have an good idea of it's behavior.

If banks start to borrow money from other countries then there is a pretty chance that the rates could come down again.

appreciate your views.

Interest rates are mainly depend on the economy of our country.

By the way my prediction is,

3 months fixed deposit interest rates will go high further (about to 12%)

Roboticfx wrote:Interest rates are mainly depend on the economy of our country.

By the way my prediction is,

3 months fixed deposit interest rates will go high further (about to 12%)

Thanks mate for your input.

Roboticfx wrote:Interest rates are mainly depend on the economy of our country.

By the way my prediction is,

3 months fixed deposit interest rates will go high further (about to 12%)

We should keep i mind that higher int. rates mean higher inflation too.. So the prevailing rates are not gonna change for say 6 months at least imo..

BTW, PB wil give u 9% FD rate on annual FD and even u can take a loan against it @ 11.5.. But the rate is for the 1st year, if int. rates could go up, these can run and vice versa,...

Light of Hope wrote:Does anybody have a clear idea of the trend of interest rates. I have some funds which I got at 14% fixed to settle one my loans which I am currently paying 14% floating both 5 years term, I was thinking to deposit this in a FD at 11% - 12% and to invest some in the CSE, if the trend becomes good.

.

14% fixed rate?? form were did u get that?
Month back I got a loan @ 13% float. fixed rate was 15%

Light of Hope wrote:Does anybody have a clear idea of the trend of interest rates. I have some funds which I got at 14% fixed to settle one my loans which I am currently paying 14% floating both 5 years term, I was thinking to deposit this in a FD at 11% - 12% and to invest some in the CSE, if the trend becomes good.

because if the rates become lower I could settle the fix interest loan and if the rates become high, I could settle the floating interest loan and have a short term benefit.

what I want to know is

will the rates go up short term - lets say next six months and up to what %

What will the rates be in 1 to 2 years

I know it would be difficult to predict 100% correctly, but someone can have an good idea of it's behavior.

If banks start to borrow money from other countries then there is a pretty chance that the rates could come down again.

appreciate your views.

My guess is this present rise is mainly because of the year end to show their good finacial position, now u can see all the private banks are giving very attractive interest rates for short term FDs ( 3months , 6months). I guess this trend would be settled down from January.

seyon wrote:

Light of Hope wrote:Does anybody have a clear idea of the trend of interest rates. I have some funds which I got at 14% fixed to settle one my loans which I am currently paying 14% floating both 5 years term, I was thinking to deposit this in a FD at 11% - 12% and to invest some in the CSE, if the trend becomes good.

because if the rates become lower I could settle the fix interest loan and if the rates become high, I could settle the floating interest loan and have a short term benefit.

what I want to know is

will the rates go up short term - lets say next six months and up to what %

What will the rates be in 1 to 2 years

I know it would be difficult to predict 100% correctly, but someone can have an good idea of it's behavior.

If banks start to borrow money from other countries then there is a pretty chance that the rates could come down again.

appreciate your views.

My guess is this present rise is mainly because of the year end to show their good finacial position, now u can see all the private banks are giving very attractive interest rates for short term FDs ( 3months , 6months). I guess this trend would be settled down from January.

so I guess it's better to hold and watch for a while. If rates come down, I could settle the loan I took on fixed rate. and benefit from the downward trend by keeping the floating rate loan.

thanks guys for the info, anyways need find more information before making a decision.

If we see the Treasury Bond Auction, Short term interest rate will be go up.

Kumar wrote:If we see the Treasury Bond Auction, Short term interest rate will be go up.

Pls enlighten us more on this..

Interest rate for loan will be increased after this month.

floating rate will be around 16%
fixed rate will be around 19%

Do not know about the accuracy of the values and got from my bank adviser.

Flashmark wrote:Interest rate for loan will be increased after this month.

floating rate will be around 16%
fixed rate will be around 19%

Do not know about the accuracy of the values and got from my bank adviser.

it looks a bit high, anyways possible

smallville wrote:

Kumar wrote:If we see the Treasury Bond Auction, Short term interest rate will be go up.

Pls enlighten us more on this..

this is done by the central bank, and the commercial bank rates are based on these. last few months, rates have been increased gradually.

Dear friends.....

Interest rate is a monetary policy tool used by central banks to control broad money supply.

when interest rate are going up.... the inflation is supposed to go down .... but growth too would go down.

The stock prices would move accoding to balancing act of 2 reasons
1. Risk /benifit ratio increases in FD's favor.
2. Discounted future earnings (NPV) should increase as inflation drops.

keep in mind that rising inflation is also a sign of growth of GDP/per capita income and when inflation drops unemployment rises.

this increase percapita has 2 outlets

1. consumer spending - causes inflation
2. increased inflation generaly makes increased EBIT.(input costs are lagging and higher earnings somewhat offsets increased cost of capital)
3. increased EBIT will increase TAX revenue in the short to medium term.

ONLY PROBLEM IS WITH LONG TERM. WHEN INTEREST RATE IS KEPT HIGHER FOR TOO LONG THE INPUT COSTS WILL CATCH UP AND THE EBIT WILL BE HIT.

So my assumption is the interest rate will rise for 3 and 6 months for about 3 more months but 1 year should remain.

JUST LIKE STOCK MARKETS .... INTEREST RATES TOO SHOULD GO THROUGH CYCLES.

it's no wonder budda used the "chackra-meaning cycle in sanscrit) as the essential depiction of all physical phenomina.

the universe runs on cause and effect BUT CAUSE AND EFFECT IS A BIT OUT OF PHASE. EFFECT IS NOT INSTANTANIOUS TO CAUSE( BECAUSE OF RELATIVITY PRINCIPLES NOTHING CAN MOVE FASTER THAN LIGHT AND THE MAXIMUM SPEED AT WHICH INFORMATION TOO CAN MOVE IS LIMITED.

The only edge one has is the time between cause and effect to take action

dear friends, will the interest rates go up further in the coming months? please share your thoughts.

thanks.

2011_NewComer wrote:dear friends, will the interest rates go up further in the coming months? please share your thoughts.

thanks.

My predictoin is interest rates would be falling in the comming months due to some valid reasons;

-Inflation rate has come down to 3.8% in Dec.2012 from 4.9 % in Dec. 2011
-Reacent Exchange controll relaxation to enable any bank,finance company or any other company to borrow funds from foreign banks and other international financial institutions. ( this will ease enhancing fund requirements to fullfil CB regulations and to meet increasing demand for funds without racing money localy thus reducing the competition among the banks and finance companies for pmoting deposits.)
-Some banks already stopped recently introduced promotional campaigns with attractive interest rates.
-Most of the companies are doing well and genarated large profits during the current financial year.

Considering the above I believe interest rates would come down in the coming months..

2011_NewComer wrote:dear friends, will the interest rates go up further in the coming months? please share your thoughts.

thanks.

that seems to be the case, it could go up