SBI sees interest rates having peaked - chairman

NEW DELHI (Reuters) - State Bank of India, the country's largest lender, sees interest rates as having peaked but does not expect them to decline much, as inflation moderates and liquidity is tight, its chairman said on Saturday.

The Reserve Bank of India lifted its key lending rate three times in June and July to take it to a seven-year high of 9 percent as inflation surged into double digits.

"Inflation has now come down, at least a little bit, so it is unlikely (interest rates) will go up very much higher. It may not go down very much," O.P. Bhatt told reporters on the sidelines of a conference.

"The liquidity situation is also really tight, so in this scenario it is difficult for me to imagine a raise by the Reserve Bank of India," he added.

Monetary and other government measures have brought inflation down to 11.99 percent in late September from a 13-year high of 12.63 percent in early August, but economists expect it to remain in double digits for some months and see no immediate rate cuts.