Lower interest rates will create economic
growth. The monetary policy review of the Reserve Bank of India is scheduled
for tomorrow. An interest rate cut, at a time when demand was not showing any
signs of revival, would boost sentiments, especially for interest-rate
sensitives like the car and real estate sectors. Once the RBI cuts the repo rate, the banks will also pass on
the cut to their borrowers. At lower interest rates, people will borrow more
and will buy more homes, cars, two-wheelers, consumer durables etc. Lower
interest rates will improve car sales and in turn the rubber industry. All this
borrowing and spending will revive growth and the economy will grow at higher
rate.
Today, the contract for delivery in August closed
at ¥270.9 a kg on the Tokyo Commodity Exchange and tomorrow it is expected to touch
a high of ¥277 a kg. RSS4 grade rubber in India closed at `.162.50
a kg and the price of RSS3 grade closed at `.157.22 per kg at
Bangkok. While Malaysian SMR 20, closed at `.146.23 a kg. On the
Tokyo Commodity Exchange, March futures series closed at ¥256 a kg.
Read
lot more in Rubber4U – 1st April 2013 issue
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