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RE:Inflation?
by Venkateswaran Natarajan on Apr 07, 2007 04:24 PM

The fact of the matter is "The government does not know how to rein in inflation" rather than burdening the common man with rate hikes. The most ideal solution would be to try and increase the supply of housing projects. That way the demand supply gap will be lessened and the rates will go lower. The government is instead punishing the common man who has bought a house to live and not as an investment. For the businessman he is going to pass on the rate hikes to the consumers. So the persons getting affected are common middle class people. Further even Fixed loans are not entirely fixed, there is a clause whereby the banks can increase the EMI or Tenure of the loan. This clause is inserted typically to protect the bank's interests.

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The above message is part of the Discussion Board:
Is RBI's rate hike justified?