HDFC chairman Deepak Parekh said on Tuesday the interest rate would remain stable for the next three to four months as there is sufficient liquidity in the system.
"There is sufficient liquidity so far in the market. I don't think it is going to harden that much at least in the next three to four months," he said when asked if the large government borrowing programme will have an adverse impact on interest rates.
"Government borrowing programme is over longer period of time and finance minister did say he will work with RBI and find a way to minimise the borrowing," he said.
The government plans to borrow nearly Rs 4,00,000 crore (Rs 4,000 billion) from markets during 2009-10, a rise of about 50 per cent over what it borrowed a year ago, to fund the widening fiscal deficit necessitated after stimulus doses for the economy.
The net market borrowing of the government through issue of dated securities in 2009-10 is estimated at Rs 3,97,957.46 crore (Rs 3,979.57 billion), finance minister Pranab Mukherjee said while presenting the Budget 2009-10.
Against the Budget estimate of Rs 1,00,571 crore (Rs 1,005.71 billion) for 2008-09, the government borrowed Rs 2,61,972 crore (Rs 2,619.72 billion) to fund increasing expenditure required to insulate the domestic economy from the impact of global financial crisis.