High Interest Rate

MUMBAI: Once again, the faceless Indian and countless households will foot the bill for the war on inflation. They will have to accept lower returns on bank deposits, but will have no respite from high interest rates on home loans. Hard luck for new home buyers, who were hoping for rates to soften a little before taking the plunge.

Now, there's a higher levy on the banking system, and individual savers and retail borrowers will have to bear it. On Tuesday, Reserve Bank of India (RBI) governor Yaga Venugopal Reddy announced a hike in the cash reserve ratio (CRR) for banks by half-a-percentage point to 7%, even as he kept key rates unchanged. CRR is the slice of customer deposits that banks set aside as cash with RBI. Since this money lying with the central bank does not fetch any return, a CRR hike is like a `tax' on banks, who recover it from customers.

Watch that credit score! It could end up costing a lot

Not paying attention to your credit score can cost you a lot of money.

Many people don't know that their score -- a three-digit number derived from an analysis of how they handle debt -- is the key determinant of what interest rate they'll pay on credit cards, auto loans and home mortgages. The lower a person's score is, the higher the interest rate and, therefore, the higher the cost for the loan.

A new study by the Consumer Federation of America and Washington Mutual Inc., the Seattle-based savings bank, found that fewer than six out of 10 Americans have obtained their credit scores, and half of those surveyed consider their understanding of the scores as "fair" or "poor."

Stephen Brobeck, executive director of the nonprofit CFA, which is based in Washington, D.C., said he found the statistics disturbing because consumers can't work to improve their scores if they don't know what the scores are.

'Cut spending or rates will rise'

AUSTRALIANS must cut spending to help drive down inflation - or risk another rate rise later this year, the Reserve Bank has warned.

The RBA's warning is backed by industry experts who argue homebuyers should merge debts and concentrate on paying off their homes. The RBA yesterday said inflation was stubbornly staying high because we are spending too much. It revised its annual inflation forecast of 2.5 per cent - warning it might break the upper limit of 3 per cent. If that happened, the bank's board would be almost certain to impose the sixth interest rate increase since the 2004 election. Mortgage Choice's Warren O'Rourke said owners should not panic. "The most important thing is to consolidate household debts into the mortgage where they will be charged a lower interest rate," he said.

Keep politicians away from the production line

WHILE most commentators have welcomed the Reserve Bank's inflation-dampening interest rate rise, interest payments are part of the direct expenses of doing business.

Victorian companies and jobs are more vulnerable to general cost increases than those in other states, because of the state's prominent manufacturing base and its strengths in exporting educational services.

Briefing - ASIA REAL ESTATE - Aug 3, 2007

Rents have risen at their highest rate in 18 years because investors have sold property assets to boost their superannuation, housing economists say.

And an interest rate rise next week would make buying a home even harder for those hit already with higher rent.

PIONEER GROUP INAUGURATES US$5 MLN BUILDING IN CEBU

CEBU CITY - The Pioneer Group recently inaugurated its P230 million (US$5 million) building at the Cebu Business Park, the city's new business district.

Pioneer president and chief executive officer (CEO) Lorenzo Chan said the company already had plans for expansion since 1961, and "Cebu is the first place that came into our mind."

AUST'S MACARTHURCOOK SAYS NO DIRECT EXPOSURE TO US SUB-PRIME

SYDNEY - Property investor MacarthurCook (ASX:MCK) says it has no direct exposure to the US sub-prime mortgage market.