Bankers are toying with the idea of hiking lending and deposit rates, thanks to the sudden jump in inflation rate to 7.51 per cent in the week ended July 24 to 7.51 per cent. The rising inflation has seen depositors earning a negative real return.Corporates are also in a hurry to lock their working capital requirement at lower rates. Corporates are rushing up to raise funds at lower rates as they too expect hardening of interest rates. Inflation is expected to go up further, factoring in the rising crude oil prices. ‘‘With robust growth in the corporate sector, the demand for core working capital of corporates is expected to go up,’’ said Samir Bhatia, country head (corporate banking), HDFC Bank.However a senior official from ICICI Bank said: ‘‘It would not affect the corporate borrowing programme as they would make use of the money after eight to nine months’’.Keki Mistry, managing director, HDFC, said: ‘‘The high inflation is worrisome and unexpected. However, the developments in the US market, which have shown a fall in the expected job growth, and consequently check another round of interest rate hike shortly is the comforting factor for the domestic market. This definitely keep a check on immediate interest rate hike in Indian market’’.‘‘The pack of jokers in the higher inflation is crude oil prices. Along with a possible uncertainty over the monsoon, the crude oil prices have significantly contributed to the spurt in the inflation,’’ the official from ICICI Bank added.
