With huge liquidity in the money market, partly contributed by capital flows, the interest rates are expected to soften in the short term, according to Industrial Development Bank of India chairman V P Shetty.
Interest rates have peaked. The Reserve Bank of India (RBI) was likely to use instruments other than rate hike to manage excess liquidity in the system, Shetty said after the bank's annual general meeting on Saturday.
Inflation has shown declining trend for the last four weeks and was hovering in the range that RBI has estimated, he said. It further eased to 4.28 per cent for the week ended June 9 compared with 4.80