Interest rates unlikely to fall in next 3-6-months: Parekh

MUMBAI: Interest rates are unlikely to decline in the next 3-6-months due to high Government borrowings, a top financial sector expert said.

"Interest rates will come down (only) when cost of funds of banks comes down....I don't think rates will fall in the next 3-6 months (as the huge Government borrowings may tighten liqudity in the system)," HDFC's Chairman, Deepak Parekh, told reporters.

He was speaking at a function organised by the Maharashtra Chamber of Housing Industry (MCHI) here today.

On demand for property, Parekh said that there is ample demand in the affordable housing sector.

Builders who don't reduce their prices would be at a loss, he said.

Kotak Mahindra Bank's Vice-Chairman, Uday Kotak, said that interest rates were likely to remain at the same level till November-December this year.

"I don't think rates will go up till November-December," Kotak said.

According to him, inflation was likely to rise and be on the higher side by March 2010.