Business Daily from THE HINDU group of publications
Friday, Nov 03, 2006

Cross Currency

Group Sites

Home Page - Economy
Industry & Economy - Economy
No signs of economy overheating: Chidambaram

Our Bureau

New Delhi , Nov. 2

The Finance Minister, Mr P. Chidambaram, on Thursday said that there were no signs of the economy overheating and that the Reserve Bank of India's (RBI) move to hike repo rate by 0.25 per cent was "well intended".

"I don't believe there is overheating (in the economy). The RBI has only cautioned. And if they had not taken action, I think some sectors may have shown some signs of overheating," Mr Chidambaram told presspersons here on Thursday. He said the repo rate hike was intended at moderating credit growth in some sectors, re-balance credit portfolios of banks and exercise prudence.

The RBI had on October 31, in the Credit Policy announcement, raised the repo rate by 25 basis points to 7.25 per cent. Repo rate is the rate at which the RBI lends short-term funds to banks.

After announcing the busy season Credit Policy, the RBI Governor, Dr Y.V. Reddy, had said that the repo rate hike was a clear signal to banks that getting liquidity from the central bank could be an expensive affair. Meanwhile, Dr Ashok Lahiri, Chief Economic Advisor in the Union Finance Ministry, said that the RBI's Credit Policy was "very good" and that it balances the need for maintaining growth momentum and containing inflationary pressures.

Dr Lahiri also told presspersons on the sidelines of an insurance conference here on Thursday that the repo rate hike was a signal to banks to manage their liquidity properly.

More Stories on : Economy | Economy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page


Stories in this Section
Credit Suisse to restart operations in India

Now, a fixed-line phone with mobile features
HC puts BSNL cellular tender on hold till Nov 16
US scuttles Indian plea for WTO panel on shrimp
No signs of economy overheating: Chidambaram
Norsk Hydro offers OVL stake in Angola, Iran blocks
NTPC gets waiver on investment ceiling
Getting paid by P&G to solve problems
Cognizant to expand infrastructure
Intel CEO bullish on WiMAX network
TRAI keen to make NIXI more efficient
Gold soars on weak dollar
Nandan Exim turns active
SBI top brass take stock of declining marketshare

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line