New Delhi: Interest rates in India have almost peaked, the chairman of State Bank of India , the country’s top lender, said on Wednesday, a day after it raised its prime lending rate by 1%.
The Reserve Bank of India (RBI) last month raised its key lending rate to its highest in seven years at 9% to combat a surge in inflation, now at a 13-year peak of 12%.
State Bank took its lending rate up to 13.75% on Tuesday, following other banks which have also raised interest rates.
“They have almost peaked,” O.P. Bhatt told reporters ahead of a meeting of heads of state-run banks with the finance minister.
He cited softening oil prices, a good monsoon and lower prices of commodities except steel, as factors pointing towards a peak in interest rates.
“The demand pull from Beijing Olympics is also over, the global economy is slowing down. So there seems enough reason that it has peaked or near peaked unless there is any further cause for action by external factors or by the RBI,” he said.
International crude oil prices steadied above $113 per barrel on Wednesday, more than $30 off a peak above $147 hit in July as high fuel prices and economic problems hit demand worldwide.
SBI shares were trading 1.2% up at Rs1,574 in a flat Mumbai market.