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Rediff.com  » Business » Finmin expects RBI to continue soft rates

Finmin expects RBI to continue soft rates

October 23, 2009 17:04 IST

D Subbarao Ahead of the monetary review next week, RBI governor D Subbarao discussed the macro-economic situation with finance minister Pranab Mukherjee on Friday and the finance ministry hoped the central bank would not tweak its soft interest rate policy.

"It was a good long meeting with the governor. He met the finance minister. He reviewed the situation. Rest, wait for the policy," finance secretary Ashok Chawla told reporters.

Asked whether he would stick to his statement given a few days back that he expects RBI to maintain its accommodative monetary policy stance, Chawla said, 'Yes, of course.'

After the meeting with Mukherjee,  said he reviewed the "macro-economic situation" with thes finance minister but refused to answer any query on inflation and economic recovery.

"I am not prepared to answer any questions now because our quarterly policy review is just four days away. It is neither possible nor advisable for me to speak anything on the policy," the RBI governor said.

The RBI is widely expected to maintain a status quo on policy rates, despite inflationary pressures.

However, Moody's Economy.com expects the central bank to hike cash reserve ratio, the amount that banks keep with RBI, by 50 basis points.

Image: D Subbarao

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