Interest rates may not ease soon, says Kochhar

ICICI Bank does not expect interest rate in the banking sector to come down soon, Joint Managing Director and Chief Financial Officer Chanda Kochhar said today.

“What happens to inflation and interest rate is the result of many factors. We have to watch the situation (inflation),” Kochhar said while replying to a query on whether inflation has peaked. Kochhar was speaking to reporters here after a book launch function.

India’s headline inflation rate has been rising sharply since the beginning of this calendar year and has stayed in double digits for the eleventh consecutive week. The latest inflation rate fell to 12.40 per cent for the week ended August 16 from 12.63 per cent in the previous week.

The Reserve Bank of India (RBI) wants to bring down inflation to 7 per cent by March-end. On the appointment of D Subbarao as the new governor of RBI, Kochhar said, “We welcome his appointment. He has the added advantage of handling the fiscal side.” The central bank’s dual objective will be to control inflation and ensure growth, she said.