For Quick Alerts
For Daily Alerts

RBI may cut rates in coming months: Kochhar

RBI may cut rates in coming months: Kochhar
RBI may lower its benchmark interest rates in the coming months as inflation has eased, pursuant to which banks may also lower their rates to some extent to pass on the benefit to customers, top banker Chanda Kochhar said.

"With inflation easing, I think that we would see policy rate cuts in the coming months," ICICI Bank MD and CEO told PTI in an interview here.

The head of India's largest private sector bank, who is here in this Swiss Alpine resort town for the World Economic Forum Annual Meeting, said that the central bank has already in its last policy statement, indicated monetary policy easing in the fourth quarter of the current fiscal.

"The RBI has also been taking steps to ensure that liquidity is made available in the system. Wholesale term deposit costs for banks have also eased in the last few months," Kochhar said.

She, however, added that the demand deposits have been under pressure for the system.

"While we would expect lending rates to come down as policy rates are eased, the extent of rate reductions by banks will also depend on the level and composition of deposit growth, the funding costs of banks and the demand for credit in the system," Kochhar said.

RBI in the mid-quarter monetary policy review last month, had kept key interest rates unchanged but had said that it is closely monitoring the evolving growth-inflation dynamics and it is likely to ease monetary policy in the January-March quarter.

The third quarter review will be unveiled on January 29. In its mid-quarter monetary policy review on December 18 last year, RBI left the short-term lending (repo) rate and the cash reserve ratio -- the amount of deposits banks have to park with RBI - unchanged at 8% and 4.25%, respectively.

Meanwhile, inflation based on movement in wholesale prices, touched 3-year low of 7.18% in December, retail inflation continued to be in double digit at 10.56%.


These levels are much above the Reserve Bank's comfort zone of 5-5.5%, inflation is showing some signs of easing in recent months.


Read more about: rbi inflation interest rate
Story first published: Friday, January 25, 2013, 15:29 [IST]
Company Search
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more