The Reserve Bank of India (RBI) today said it would lay emphasis on price stability so that there is possibility of lower interest rates in the medium term."Interest rates are market determined. Our efforts clearly is to administer the system so that we have price stability.With greater stability it is possible to have lower interest rates in the medium term," Rakesh Mohan, deputy governor of RBI, said at a conference on cash, treasury and risk management in India.Interest rates can fall in the medium term if intermediary and transaction costs fall. The central bank aims to maintain price and financial stability, he said.Uncertainty about global oil prices still persists even they have declined by around 25% from July's record highs, he said."We have said in the mid-term review the high level of oil prices continues, which it does. The uncertainty remains," Mohan said at the conference organised by EuroFinance."Our aim is to bring inflation down over a period of time...We don't target inflation. Given that international inflation is around 2-3%, and ours is around 4-5%...We have to constantly strive to bring it down," Mohan said.The RBI in its mid-term monetary review raised the repo rate, at which commercial banks borrows from the central bank, by 0.25% to 7.25% to dampen inflationary expectations due to credit growth.
