Our Bureau

New Delhi, Aug. 19

THE Finance Minister, Mr P. Chidambaram, has hinted that interest rates would continue to remain stable, and attributed the dip in inflation to the good management of money supply by the Reserve Bank of India.

"I don't expect any change (in interest rates) in the medium term," Mr Chidambaram told reporters on Friday.

He said the inflation is down because of supply side management and the RBI's "adroit management" of money supply.

Inflation for the week ended August 6 fell to a two-and-a-half-year low of 3.35 per cent from the previous week's 3.84 per cent.

Mr Chidambaram made it clear that the dip in inflation would not stop the Government from keeping a close vigil on prices of essential items.

"One has to be careful and vigilant. We are carefully watching five items - sugar, wheat, rice, steel and cement," he said.

(This article was published in the Business Line print edition dated August 20, 2005)
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