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RBI Governor non-committal on rates

Indian central bank Governor Bimal Jalan reiterated concerns on Thursday about the country's industrial slowdown, but gave no commitment to review interest rates despite the latest cut in US rates.

Speaking to reporters after a meeting of the central board of directors of the Reserve Bank of India in Calcutta, Jalan said there were no direct linkages between the US Federal Reserve's rate cuts and the domestic market.

"They are part of the environment which we take into account along with everything," Jalan said when asked whether the Fed rate cut would prompt a similar response from the RBI.

The US Fed Reserve on Tuesday reduced rates by a half point, its fifth cut this year, aimed at reversing a US economic slowdown.

Jalan said the industrial slowdown was an area of concern and the central bank was keeping tabs on the economy.

"We have said the industrial slowdown is an area of concern. We are keeping a watch on the economy," he said.

Indian industrial output growth slowed in 2000-01 to 4.9 per cent from 6.7 per cent leading to calls from economists and industrialists for rate cuts.

India's central bank has already cut its bank rate, a benchmark used by commercial banks to price their loans, twice this year by a total of 100 basis points to 7 per cent from 8 per cent.

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