With inflation soaring to a 40-month high of 7.41 per cent, IDBI has said it would not be cutting its Benchmark Prime Lending Rate (BPLR) soon. The bank was earlier mulling a cut in its BPLR, which now stands at 13.75 per cent. Last month, IDBI had announced its decision to effect a 0.50 percentage point downward revision, which it put on hold. Citing “prevailing market conditions”, IDBI had said it would review the situation in two weeks. “After seeing the latest inflation figure (7.41 per cent), we have decided not to reduce our BPLR. A cut in lending rates may not be prudent since the Reserve Bank of India (RBI) might hike the Cash Reserve Ratio in its credit policy if inflation remains high,” IDBI chief financial officer R K Bansal said on Friday. The RBI is scheduled to announce its monetary policy for fiscal 2008-09 on April 29.
