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RBI governor assures FM of appropriate action on rate cuts

RBI governor assures FM of appropriate action on rate cuts
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First Published: Mon, Feb 23 2009. 03 40 PM IST
Updated: Mon, Feb 23 2009. 03 40 PM IST
New Delhi: The Reserve Bank of India (RBI) is constantly monitoring economic conditions and will take action as needed, governor Duvvuri Subbarao told the finance minister after his recent meetings abroad with other central bank heads.
The RBI said on its website that Subbarao met Finance Minister Pranab Mukherjee on Sunday night and briefed him on the economic situation.
“The governor briefed the finance minister on the evolution of the global financial crisis, the outlook for global economy and the response of advanced and the emerging economies to the crisis,” based on his meetings with central bank governors in Basel last month and Kuala Lumpur in February, the RBI said.
Indian inflation fell to its lowest in more than 13 months in early February, dropping below 4%, which analysts said made it more likely the central bank would cut rates to support faltering growth.
In Tokyo last week, Subbarao said there was room to cut rates, but the question was when and by how much.
After a series of cuts since October, the bank’s key lending rate, the repo, stands at 5.5%, while the reverse repo is at 4.0%.
The economy is expected to grow 7.1% in the fiscal year ending 31 March, slowing from 9.0% in the previous year.
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First Published: Mon, Feb 23 2009. 03 40 PM IST