The Reserve Bank on Thursday said inflation rate in the country is still high by global standards and needs to be brought down further.

"Our inflation is still high by world standards and it needs to be brought down further," RBI Deputy Governor Rakesh Mohan said at a lecture on "Growth and Macroeconomic Issues and Challenges in India" organised by the Institute of Economic Growth, as a part of its golden jubilee celebrations in New Delhi.

The RBI's objective has been to ensure liquidity and still keep inflation and interest rates low, he said.

Inflation rate inched to over six month high level, piercing the four per cent mark for the week ended January 26, though it was below the RBI's target of containing it to around 5 per cent during the current financial year.

Reserve Bank in its quarterly review on January 29 left benchmark interest rates unchanged citing inflation control as the priority of central bank.

Asked whether banks have more headroom for reducing lending rates in the near future, Mohan said, "What they are doing is not inconsistent with the RBI policy."

While announcing the quarterly review of the monetary policy on January 29, RBI Governor Y V Reddy too had said that net interest margin of the banks was high and there was scope for reducing the lending rates.

Outlining the challenges facing policy makers as India seeks 10 per cent-plus growth rate in the next five years, Mohan said excessive credit growth could also lead to an asset price bubble.