INDIA BUSINESS WORLD - March 16^th - March 31^st - 2008

RBI UNLIKELY TO CUT INTEREST RATES: ASSOCHAM

The Reserve Bank of India is unlikely to cut interest rates despite signals of slowdown in growth as pressure on inflation persists, industry body Assocham said. With crude oil price touching $110 a barrel and commodity prices rising globally, the inflationary pressure is likely to continue. Close to 85% of the 130 CEOs surveyed by Assocham said though the government has announced some fiscal measures in the recent budget, the Indian economy cannot remain insulated from a sharp rise in global commodity prices. Inflation seems to be breaching RBI’s tolerance level, believed 74% of the respondents. Under these circumstances, policy makers would refrain from moderating the interest rates to push growth.