Date:20/03/2008 URL: http://www.thehindubusinessline.com/2008/03/20/stories/2008032052540600.htm

Back Situation not favouring rate cut: Rangarajan

Our Bureau

New Delhi, March 19 Interest rate may not be brought down given the current inflation situation in the economy, according to Dr C Rangarajan, Chairman of the Prime Minister’s Economic Advisory Council.

“In the current scenario when inflation is rising, it is difficult to bring down the interest rate. I don’t see a possibility of interest rate coming down”, Dr Rangarajan told reporters on the sidelines of an award function.

Dr Rangarajan said that the current rate of inflation was “just beyond the comfort zone”.

He added that he would have liked inflation to stay between 4-5 per cent, preferably at 4 per cent level. .

For the week ended March 1, inflation rate stood at 5.11 per cent. It was for the second week in a row that the rate was over five per cent.

The Reserve Bank of India wants to limit average rate of inflation for 2007-08 at five per cent.