15/03/09 World Bank: India can cut rates further
The World Bank's chief economist this week predicted that India has scope for further rate cuts as inflation falls according to the Economic Times.
Justin Yifu Lin said, "now, inflation is no more a concern. Deflation is a concern, so I think India can reduce interest rates".
India's annual inflation rate has eased to near seven-year lows of 2.43% as of February-end, below the previous week's annual rise of 3.03%.
Lin said India should use its $250 billion worth of foreign exchange reserves to finance infrastructure projects.
India is looking at $550 billion of investments over a five- year timeframe to develop a creaky infrastructure, which is a major obstacle for sustaining a high growth rate.
