For borrowers, the news could have been better and the savers and lenders are not celebrating yet. The rate at which money is lent becomes the income of the lender and an expense to the borrower and this time around the Reserve Bank of India (RBI) has made no change in the key rates that influence all others in India. In his latest credit policy, RBI Governor Dr Yaga Venugopal Reddy has opted for status quo on many key areas, including interest rates. Reddy might have several compulsions for not going for a change in the bank rate or cash reserve ratio (the key signals for interest rate changes), but borrowers are still happy. If you’ve taken a home loan or car loan, your interest payments will continue at the same level as before. The status quo on interest rates means borrowers need not recalculate their EMIs (equated monthly instalments) or interest rate payments. But many bankers like Corporation Bank Chairman Cherian Varghese feel that the downward movement in rates may be over and there could be an upward movement later. It may be time to lock into fixed rates. Many countries, including the US, have already hinted at the possibility of a rise in interest rates. But Reddy has not made any commitments in this policy. Obviously, India Inc will be happy if the present low interest rate regime continues. Corporate profits had zoomed in the last two years due to a fall in interest burden. Shareholders had benefited from better corporate performance last year. The actions and comments of the RBI Governor will be keenly watched in the coming days. But as expected, the RBI did not make any major steps as the new government is yet to take over and policies are still not clear. Both as a lender and a borrower you are in the same position as before. Deposit rates are unlikely to move up and home loan rates unlikely to move down. Locking in at the current rates is a good strategy The price levels are expected to be a concern in the coming months. The main culprit could turn out to be crude oil prices which are already over the 13-year highs. The RBI alone cannot control price levels in the country. It will have to be supported by the Central and State governments. Any hike in petrol and diesel prices here will have a domino effect. The RBI has marginally increased the inflation estimate from 4.5 to 5 per cent to 5 per cent in this policy. Nothing to worry about. Not yet. It is time to lock yourself in the highest fixed return instrument (like a National Saving Certificate or a Monthly Income Scheme-Recurring Deposit combo) as a lender. As a borrower it is time to lock in at the lowest fixed interest rate for the longest term you can get. What is a Credit Policy