Interest rates have stabilised: SBI chief

New Delhi: Country's largest lender SBI said interest rates should start declining now as they have stabilised and hoped that RBI would strike a balance between controlling inflation and promoting growth in its annual policy review next week.

State Bank of India (SBI) Chairman Pratip Chaudhuri, who was here for the annual performance review meeting of state- run banks with the finance ministry, said interest rates have stabilised and there should be some deceleration from now on.

When asked if the Reserve Bank of India (RBI) would hike policy rates by 50 basis points in its annual policy review meeting on May 3, Chaudhuri said there are other ways to cool market, apart from interest rate hike and the central bank would balance the two objectives of controlling inflation and sustaining growth.

The overall inflation, measured on the basis of wholesale prices, stood at 8.98 per cent in March, higher than the 8 per cent projection of the Reserve Bank.

To cool inflationary pressures, the central bank has hiked key policy rates eight times since March, 2010.

Experts have said RBI is likely to go for another mild hike on May 3 as inflationary pressure still persists.

The rate hikes are intended to suck out excess liquidity from the system and tame demand.

The repo and reverse repo rates stand at 6.75 per cent and 6.25 per cent, respectively.

Source: Financial Express