At a global trade conference organized by Indian Merchants Chamber (IMC) as part of its centenary celebrations Deepak Parekh, chairman of Housing Development Finance Corp (HDFC), said that during the first quarter of next financial year (2008-09) the Indian banking industry expects a decline in the interest rates.
He said but this is possible only when the central bank, Reserve Bank of India (RBI), do not increase the cash reserve ratio (CRR).
"Interest rates could go down by 25 basis point if RBI does not hike the CRR," Parekh said.
Parekh further added that there would be decline in the interest rates because of the rupee strengthening against the dollar.
But, Parekh said as India is not an export-based economy; a decline in the US would not affect it in a big way.
He said that China and South East Asian countries, however, would experience a tremendous impact of a US slump.
The conference was inaugurated by the Maharashtra Chief Minister Vilasrao Deshmukh in the presence of Minister for Overseas Indian Affairs Vayalar Ravi. Chairman of the Knowledge Commission Sam Pitroda also attended the inauguration.
More than 150 delegates from 15 countries and 250 from India attended the conference.