'No pause in rate hike for now'

Ahead of the second quarter review of monetary policy on October 25, the Reserve bank of India (RBI) indicated it may not lower key interest rates, since inflation was still high.

"...We need to bring inflation down in order to bring interest rates down," Governor D Subbarao said here. He added the central bank was conscious of the need to bring down interest rates to boost the economy, but this might take time. He also expressed concern over the rising inflation, but said it could be controlled by the end of this year.

RBI is unlikely to pause its rate rise strategy in the quarterly review of the credit policy on October 25, owing to the slowdown in industrial output growth. The central bank has already raised policy rates 12 times since March 2010 to control inflation, which stood at 9.8 per cent in August.

The Index of Industrial Production declined to 4.1 per cent in August, compared with 4.5 per cent in the year-ago period

Addressing members of the Rajasthan Chamber of Commerce, Subbarao said economic growth would remain between 7.5 per cent and eight per cent.