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No need for hiking interest rates, says FM

The Indian finance minister says at current rates it is not difficult to contain inflation and sustain and support growth.

india Updated: Sep 21, 2006 16:46 IST

Indian Finance Minister Palaniappan Chidambaram said on Thursday there was probably no need for his country's central bank to raise interest rates further and that economic growth would accelerate in the next fiscal year.

"At the current interest rate level, we should be able to contain inflation, as well as sustain and support the growth," Chidambaram told Reuters in an interview, while visiting Seoul.

India's economy has grown at an average of 8.0 per cent in the past three years, and its central bank forecasts growth at 7.5-8.0 per cent in the fiscal year to March.

Chidambaram also said there would be more upside factors than downside risks for Asia's fourth-largest economy for the next fiscal year ending in March 2008.

India's central bank has raised its benchmark short-term rate three times this year to 6.0 per cent.

The government aims to keep wholesale price inflation within a range to 5.0-5.5 per cent this fiscal year.

First Published: Sep 21, 2006 16:46 IST