DHFL, Srei hike rates by up to 0.50%

This pressure is expected to continue as long as our monetary policy remains tight due to the overall macro- economic scenario and rupee depreciation, says Srei chief executive Bijoy Daga

Mortgage lender DHFL and infra financier Srei Infrastructure Finance today hiked their lending rates by 0.25% and 0.50%, respectively.

DHFL, whose larger rival HDFC also hiked its rate by a similar proportion earlier this month, said it has increased its retail prime lending rate (RPLR) by 0.25%, it said in a statement.

A company spokesperson said the RPLR will now move up to 18.50%.

Meanwhile, Srei hiked its benchmark offering by 0.50% to 18% per annum, it said in a statement.

"This pressure is expected to continue as long as our monetary policy remains tight due to the overall macro- economic scenario and rupee depreciation," its chief executive Bijoy Daga said.

He acknowledged that the rate hike comes when the cost of funds have increased for the infrastructure sector and added that he hopes the government makes a "concerted effort to check the fall in rupee."

The move follows similar ones by a slew of private sector lenders and the state-run Andhra Bank, after the Reserve Bank squeezed liquidity in the system through a series of moves to check the rupee depreciation starting July 15.

While the rupee is continuing to depreciate -- it breached the 66 mark against the dollar today -- the RBI measures have hardened rates in the money market, especially at the short end, which has pushed up the cost of funds in the system.