Want more cuts - Parekh

The banking industry is hoping for more rate cuts by the Reserve Bank, which in turn, will help soften both deposit and lending rates, a top financial industry expert said.

"Yesterday, the RBI has cut repo rates and we hope some more reductions take place in rates," HDFC's Chairman, Deepak Parekh, said here today.

The Reserve Bank had cut its key short-term repo rate by 1 per cent yesterday to 8 per cent.

Asked whether interest rates could be expected to decline now, Parekh said that there was a likelihood of deposit rates getting reduced first followed by a softening in lending rates.

On the current liquidity situation in the system, Parekh said that "the current liquidity is enough."

Real estate prices should decline, Parekh said, when asked his outlook on the sector. "Sales are dull presently," he said.

Discounts given by developers have not been able to attract buyers, he said.

High interest rates (at 12 per cent) were not affordable for the common man, the HDFC chief said, adding that interest rates should be at around 8-9 per cent which would then be affordable for the common man.