Chidambaram to address RBI board tomorrow

Finance Minister P Chidambaram is scheduled to address the central board of Reserve Bank in a customary post-Budget meeting in New Delhi on Friday.

The minister is likely to inform the RBI board about the steps taken to contain fiscal deficit and may underline the need for reducing interest rates to promote growth.

Chidambaram in a post-Budget interview to PTI earlier this week had said, "Well I can't direct Reserve Bank to do this or to do that.

“All I can say is as statement of fact -- if policy rates are reduced it will help us to get 6.5 per cent growth that we have target."

"I am sure that monetary policy advisory committee to the Governor will take note of all that we have done, all that

we have promised to do and advise him appropriately and I am sure Governor will take the decision in his best judgement," he had said.

The Finance Minister in his post-Budget discussion with industry had said that fiscal deficit may be lower than provisional figure of 5.2 per cent of GDP in 2012-13.

Chidambaram also expressed the hope that RBI would cut key interest rates going forward.

RBI is scheduled to announce its mid-quarter policy review on March 19.

In its last review on January 29, the central bank had lowered short term lending and borrowing rate by 25 basis points.

It has also slashed cash reserve ratio by 25 basis point to inject liquidity of Rs 18,000 crore (Rs 180 billion) into the system.

RBI has pegged the economic growth in the current fiscal at 5.5 per cent.