Sunday October 21, 2018
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Rupee to remain volatile in the midst of Greek crisis, says Arvind Subramanian

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By NewsGram Staff Writer

The Indian government on Monday said it was closely monitoring the Greek situation and euro market movements after austerity proposals by creditors being rejeted in a referendum posed the possibility of the country’s exit from the euro zone, while the rupee may be affected due to the outward flight of investment.

“In these situations what mostly happens is there is flight to dollars, to a safe haven. Rupee might also be affected by that. But nothing gets unusual at all so far,” Chief Economic Advisor Arvind Subramanian told reporters here.

“This is a drama which is going to play out for some time. We are well protected in at least three ways. Our macro-economic situation is much more stable. We have reserves. We are an economy which is still a very attractive investment destination. So I think we are relatively well insulated,” he said.

“As for the crisis itself, it is going to going to be long and prolonged,” he added.

Over 61 percent of Greeks voted “no” on Sunday, responding overwhelmingly to Prime Minister Alexis Tsipras’ calls to reject a proposal by the country’s creditors for more austerity in exchange for a financial bailout.

On possible impact of the crisis on Indian economy, Subramanian said that as the crisis plays out, “financial markets are going to be volatile. Both the ECB (European Central Bank) and Fed (US Federal Reserve) will take this into account”.

“We will have to see how the euro moves now. We are closely monitoring the Greek situation. There could be some reaction on the Fed rate hike,” Finance Secretary Rajiv Mehrishi said.

He had last week expressed apprehension that if yields on euro bonds go up, it might impact inflows and outflows from India.

Indian industry feels that if a crisis developed for Europe due to Greece, India too could feel the tremors like the rest of the world.

What is worrying is that the overall situation with regard to India’s merchandise exports does not look promising this year and the troubles in Europe could only deteriorate the prospects,” the Associated Chambers of Commerce and Industry of India (Assocham) said in a statement here.

“There is a need for RBI and the finance ministry to keep a close eye on the muddy global situation and its possible effect on India’s capital flows and the currency movement,” it added.

India’s merchandise exports continued to decline for the second month this fiscal, down by over 20 percent at $22.35 billion in May from $27.99 billion in the same month of the previous year, official data showed last month.

The Federation of Indian Export Organisations (FIEO) has warned that the continuing decline in exports would result in layoffs, besides putting pressure on the current account deficit (CAD).

FIEO president S.C. Ralhan also agreed with RBI Governor Raghuram Rajan’s recent remarks that the central banks globally were at risk of slipping into the kind of beggar-thy-neighbour strategies, leading to the Great Depression of the 1930s again.

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Say Goodbye to Heavy EMIs – Opt for Flexi Hybrid Home Loan

With pre-approved offers from Bajaj Finserv on a gamut of loans including business loan, personal loan, etc., availing finance is easy and quick.

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Home Loan
Say Goodbye to Heavy EMIs - Opt for Flexi Hybrid Home Loan.
  • Flexi Hybrid Home Loan allows paying only interest as EMI
  • Principal holiday period of 4 years
  • The principal and interest after 4 years paid only on the amount utilised
  • Flexibility of flexi-interest and flexi term loan in a single loan

With the Reserve Bank of India (RBI) hiking repo rates in its bi-monthly monetary policy review by 25 bps, interest rates of several loans have already started tightening. Though aimed to control inflation, it’s anticipated that home loan borrowers will bear the brunt of the latest move by the apex bank.

Hike in repo rate would push up home loan interest rates and subsequently the EMIs. The move might be a dampener if you are a first-time home loan borrower. However, with Bajaj Finserv Flexi Hybrid Home Loan, not only do you get the requisite funds to buy your dream home but are also relieved of heavy EMIs. Read on to know more.

Home Loans
In this 21st century building a home is not everybody’s piece of cake but there is always a way for a will hence home loans provide you the way to own a house. Pixabay

Payment of only interest component as EMIs

A regular home loan, on a fixed interest rate, taken from a financial institution consists of the interest and the principal component. During the entire loan tenor, the EMI remains constant. Though the interest and the principal ratio varies during the loan tenor, the EMI remains fixed.

However, with Bajaj Finserv Flexi Hybrid Home Loan, during the initial tenor, you pay only the interest as the EMI and nothing for the principal. The principal holiday period, where you need not pay anything towards the principal, lasts up to 4 years. Only after 4 years, the EMI will constitute the principal and the interest component.

So, for instance, if the EMI of your home loan is Rs.30,000, with the interest component amounting to Rs.20,000, during the initial 4 years, you need to pay only Rs.20,000. Only after 4 years, you need to pay the principal component of the EMI. This not only reduces your EMIs but also help you better manage your finances. Also, during the interest-only period, there’s no reduction in the loan limit.

Principal and interest only on the amount utilised

Unlike a regular home loan where you need to pay interest on the entire loan amount disbursed, in case of Flexi Hybrid Home Loan, after the principal holiday period of 4 years for the balance tenor, the EMIs would consist of the principal and the interest – only on the amount utilised from your approved loan limit and not on the entire limit.

For instance, if your approved limit is Rs.25 lakh for a tenor of 15 years, and you use only Rs.20 lakh from this limit, after the principal holiday period, from fifth year onwards, you need to pay the principal and the interest only on Rs.20 lakh. This further brings down the EMI and helps in savings in the long-run.

High EMIs – No longer a hurdle

Thus, with a Bajaj Finserv Flexi Hybrid Loan, high EMIs are no longer a hurdle in purchasing your dream home. Irrespective of hike in home loan interest rate, following RBI’s move, this new and innovative home loan offering helps you buy your dream home with utmost ease.

Home Loan
You need to know we can get the loan for various purposes. Pixabay

Even if you are early into your career, where generally income levels are low, you can go on and address the crucial life goal of buying the home of your choice. The principal holiday period of 4 years not only keeps your EMIs low but also ensures you are able to take care of day-to-day expense of running a household. Apply for home loan today and enjoy the joys of owning your own home.

With pre-approved offers from Bajaj Finserv on a gamut of loans including business loan, personal loan, etc., availing finance is easy and quick. No long queues and lengthy paperwork. Just share a few basic details to know your pre-approved offer within seconds.