Low inflation may spur a dip in interest rates

NEW DELHI: If you''ve been worried about higher interest rates on your home or car loan in recent months, you can breathe easy now. With inflation at a 40-month low, interest rates could be heading downwards.
Point-to-point inflation based on the wholesale price index touched 4.83 per cent for the week ended February 26. Lower inflation in itself is a huge positive for the economy, but it could also lead to other benefits by pushing down interest rates, encouraging more investments and spurring growth.
Having reigned in inflation, which had peaked to a four-year high of 8.7 per cent on August 28, the government and RBI are expected to go back to the soft interest rate regime after the brake applied to curb price rise since September last.