No rate hike in 6 months:SBi

India inc can rejoice .State bank of India chairman O P Bhatt on tuesday indicated that there will be no increasein intrest rates for next six months despite inflationary pressure.
As inflation is rising, the speculation is rife that RBI might take measures to tighten the money supply, leading top hardening of interest rates, in its review of monetary policy in january. As the global economy is still in the grip of recession, industry captains feel that any hike in intrest rates will affect the economic recovery in india.
Bhatt said there was surplus liquidity in the system and credit offtake was slowly picking up.This situation of liquidity surplus will force banks not to increase interest rates.Because of this surplus liquidity, banks have cut deposits rates.But they are not cutting the lending rates due to slow credit offtake, despite the speculation that RBI can increase key rates(repo or reverse repo)to contain inflation.