The Hindu Business Line : ‘Interest rates hinge on inflation’

The country’s largest private lender, ICICI Bank today indicated that any respite from hardening interest rates hinged on the policy action that would be undertaken on the inflation front. “Can’t say if interest rates have peaked or not…. We have to see what happens on the inflation front and what policy steps (by the Government and RBI) are taken,” Mr K.V. Kamath, Managing Director & Chief Executive Officer of ICICI Bank, told reporters h ere today. Following the Reserve Bank of India’s announcement last month to raise repo rate by 50 basis points and cash reserve ratio by 25 basis points to 9 per cent each, many commercial banks including State Bank of India, Punjab National Bank, Bank of Baroda and ICICI Bank had raised their prime lending rates (PLR) by 50-100 basis points. Some of them had also hiked their deposit rates. Last week, the State Bank of India Chairman, Mr O.P.Bhat, had said that interest rates had peaked or near peaked.

— Our Bureau

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