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B O B Hikes I R As The World Frenzy To Hike Gathers Pace

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BoB hikes interest rates

Wednesday April 5 2006 15:47 IST

THIRUVANATHAPURAM: The Bank of Baroda has increased the rate of interest on FCNR(
and NRE term deposits with effect from April 3.
The interest rate on US $ FCNR has been increased to 5.29 per cent for one year to less than 3 years, 5.27 per cent for 4 years and 5.31 per cent for 5 years.

The Wall Street Journal's take on the coming IR storm:


Rising Rates Pinch Consumers

By Nat Worden

TheStreet.com Staff Reporter

4/5/2006 7:08 AM EDT

Click here for more stories by Nat Worden

The recent uptick in long-term interest rates may signal that the end of a long period of cheap credit is at hand. That means the economy is humming, but what would higher interest rates mean for consumers?
Government statistics show that consumer spending levels have been higher than income levels for years, prompting economic worrywarts to conclude that an eventual slowdown in consumer spending levels is inevitable. If interest rates make a sustained move to the upside now, that thesis will be put to the test.
The low-interest rate cycle that really began in 1982 but has gone to extremes in the last four years may be coming to an end here," says Paul Mendelsohn, chief investment officer with Windham Financial Services. "Gold is telling us that. Commodity prices are telling us that. It looks like the dollar may be getting ready to tell us that. You have a developing set of circumstances that could send interest rates up quite a bit."

Forewarned is forearmed.

Edited by Realistbear

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