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Indian economy needs stimulus package to continue: HSBC CEO

Last Updated: Monday, October 26, 2009 - 14:31

New Delhi: Indian economy needs the stimulus
package to continue and the Reserve Bank might not reverse its
expansionary monetary policy, which is to be reviewed by the
RBI tomorrow, HSBC India CEO Naina Lal Kidwai said.

"The (RBI) Governor is clearly concerned about inflation,
while he fully understands that having expansionist monetary
policy has been important to provide the stimulus we need,"
Kidwai told reporters after a conference on micro-finance.
"Personally, I expect the rates to remain flat. Besides,
RBI does not need to wait for credit policy, it can revise
(key) at any time when the need arises," she said.

It is important that the stimulus packages, announced by
the government and the RBI in the wake of the global
financial meltdown, continues as the country is just beginning
to see revival in industry, she said, adding that by December
India might see some actions from the central bank on hiking
policy rates.

Around that time, pressure on interest rates is also
expected to start showing, Kidwai said and added that credit
offtake has slightly improved in the last couple of months.
Though fiscal deficit is a concern, the country needed
spending to boost the economy hit by financial crisis, she

Going by the bank`s research, the HSBC India CEO said
India is likely to grow at 8 percent in next fiscal 2010-11.

Bureau Report

First Published: Monday, October 26, 2009 - 14:31
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