RBI On Gold And Housing Prices
August 24, 2012 Leave a comment
The Reserve Bank of India is worried about the rapid rise in housing and gold prices, out-running the inflation rate.
”The two markets have not only provided effective inflation hedges, but also enabled savers to earn good real returns amidst high inflation.”
Over the last two years housing price inflation has ranged between 16 – 25% during various quarters. Gold prices have increased at an even faster rate of 14-40%.
However, with housing and gold prices running ahead of inflation, there is a need for containing risks,according to the RBI.
‘While credit to housing and commercial real estate has slowed down, a close vigil is still necessary as housing price inflation has not moderated.”Hence the Reserve Bank will continue to monitor the asset prices ahead from a macro-prudential angle.