India To Respond To US Rate Cut: FM

Anticipating an indirect impact of the US financial crisis on its economy, India on Jan 24 said it will respond appropriately to a hefty cut in the US interest rates. We will respond (to the rate cut in US) through appropriate fiscal and monetary measures, Finance Minister P Chidambaram said in Davos. The RBI is due to review its monetary policy stance on January 29. The US rate cut was part of efforts to stimulate consumption to keep the world''s largest economy from slipping into a recession - fears of which had led to a meltdown in the global equity markets. We are concerned that it (US Fed rate cut) would lead to high flow of capital to India. But government is not in favour of putting curbs on capital. He said despite fears of global recession, the Indian economy is set to grow in the range of 8.5 per cent to nine per cent. However, high interest rates may have an impact on the growth trajectory.