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RBI Governor meets Pranab Mukherjee ahead of policy review

April 29, 2011 - New Delhi

Reserve Bank of India (RBI) Governor Duvvuri Subbarao on Friday met Union Finance Minister Pranab Mukherjee ahead of a policy review.

At the wake of a near nine percent inflation rate in March, there are reports that the RBI would increase its short term lending and borrowing rates by at least 25 basis points (bps).

"I have come to review the macroeconomic situation with the finance minister and senior officials ahead of a policy review scheduled for May 3. What our decision is we will let you know then," Subbarao said.

The bank has already raised its rates eight times since March 2010.

However, the government is expecting India's Gross Domestic Product (GDP) to rise to nine percent in the current fiscal year 2011-12.

But economists globally are unconvinced of India's views of nine percent growth, and are predicting a decline to below eight percent.

Last week, Goldman Sachs cut its India growth forecast to 7.8 percent from 8.7 percent for the current fiscal year, and raised its inflation forecast to 7.5 percent from 6.7 percent.


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