RBI denies discussing interest rate cut with government (Lead)

February 28th, 2009 - 10:14 pm ICT by IANS  

New Delhi, Feb 28 (IANS) Putting at rest speculations over cut in key rates, Reserve Bank of India Governor D. Subbarao Saturday said his meeting with top officials of the government was to discuss India’s position on the upcoming Group-20 (G-20) global finance ministers’ meeting.
“My meeting was only pertaining to the G-20 summit,” Subbarao told reporters, referring to his extended talks with Planning Commission Deputy Chairman Montek Singh Ahluwalia.

Economic Affairs Secretary Ashok Chawla and RBI Deputy Governor Rakesh Mohan were also present at the meeting.

The G-20 meeting is scheduled to be held March 14 in London.

The market was abuzz with speculations about further cut in interest rates by the country’s central bank as the economic growth dropped to 5.3 percent for the third quarter and inflation touched a 13-month low of 3.36 percent.

The latest growth figures now put a question mark over India’s projection of achieving 7 percent or higher growth this fiscal.

The fears of a sharp slowdown in India were confirmed Friday, with official data showing economic growth at just 5.3 percent for the third quarter, the slowest since 2003 as against 8.9 percent in the third quarter last year.

The growth in gross domestic product (GDP) was 7.6 percent in the second quarter, down from 7.9 percent in the first quarter, the latest data released by the Central Statistical Organisation (CSO) showed.

Overall, the growth for the first nine months of the current fiscal has dropped to 6.9 percent, as opposed to the impressive 9 percent economic expansion in the corresponding period last fiscal, the data showed.

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