Patna: The Reserve Bank on Friday said interest rates have peaked and indicated that it would reduce them after taking into account the Budget proposals and global commodity prices.
"The inflation and interest rate cycles have peaked and have to come down and for that the RBI will look at events like the budget (2012-13), international crude oil prices and other variable factors to calibrate its policies," RBI Governor D Subbarao said here on Friday.
Finance Minister Pranab Mukherjee will present the Budget for 2012-13 fiscal in the Lok Sabha on March 16 during which he is expected to announce steps to arrest slowdown in economic growth.
The GDP growth rate in 2011-12 is expected to moderate to 6.9 per cent from 8.4 per cent a year ago.
Defending RBI's decision to hike interest rates (Repo) 13 times since March 2010, Subbarao said the measures were required to tame inflation which had significantly crossed the threshold levels.
The RBI Governor said growth had to be sacrificed to bring down inflation. Overall inflation in January stood at 6.55 per cent.
First Published: Friday, February 17, 2012, 22:01