The RBI governor has said the interest rate environment is positive in the country. Responding to queries on whether there is scope for reduction of interest rates Jalan said the nominal rate of interest is already going down and added that more can be done.
Jalan's comments came after a meeting of the Economic Advisory Council to the Prime Minister which discussed the slowdown in the economy. Vajpayee had asked the economists to discuss if the current interest rate and exchange rate management strategy was appropriate to stimulate economic revival.
The apex bank chief said changes in interest rate cannot be the most critical element to revive the economy. He said the current rates also support a high level of deposit rates and the public will not be keen to see that drop. He added that the exchange rate management has been on the right track, is realistic and moving in the right direction.
He also said there is no cause for worry on account of the dip in the value of rupee.