HDFC may hike int rates if cost of funds rise

Deepak Parekh, Chairman, HDFC said that they may increase interest rates if cost of funds rise. HDFC home loans are seen growing 25-30% in FY09, he added. He expect a higher interest rate scenario and said he would wait for the RBI policy signal to hike the interest rate. 

He clarified that Citigroup would not be selling its stake in HDFC as of now. He also said that builders are facing difficulty in progress payment. He expects property prices to come down in the near future. He also expects a growth of 25-30% in disbursements and sanctions this financial year.

Parekh stated that HDFC can absorb 100-200 bps RBI interest rate hike. He expects inflation to come down in 6 months and GDP is seen at 7.5.

”If interest rates go up by 17-18%, we are certainly worried. But if interest rates go up by 100-200 bps, we welcome it. But I don't think the economy can sustain interest rate of 17-18%,” he said.