Inflation will come down: Chidambaram

Subscribe to Oneindia News

New Delhi, Oct 23 (UNI) Finance Minister P Chidambaram today exuded confidence that the inflation rate will come down in the days to come, describing the annual inflation rate of 11.77 per cent as a matter of concern.

The rate of annual inflation dropped marginally to 11.07 per cent from the earlier recorded 11.44 per cent, data released here showed.

''I am confident that inflation will come down,'' he told reporters here.

Talking about the tumbling stock markets, Mr Chidambaram said SEBI will address the issue of stock lending by FIIs to overseas entities.

The Finance Minister sought to dispel fears among investors, saying ''I am confident that capital inflows will increase eventually.'' He cautioned investors not to sell stocks in panic that would only aggravate the financial crisis. ''SEBI will tighten short selling norms,'' he said.

With pressure on liquidity easing the Finance Minister expressed the hope that lending activity will become brisk as banks have been advised not to park surplus funds with RBI.

''As you perhaps know, I called the Chairmen of the seven largest PSU banks on Monday and advised them that we should lend now. All have said that lending will begin aggressively because now liquidity position is comfortable. I hope that message will go down,'' he said.

''If you go by reverse repo, I think there is adequate liquidity.

The point is banks should not park their excess funds with RBI and should lend.'' Asked to comment that the rupee hitting a new record low of 49.85 against the US dollar, Mr Chidambaram said the ups and down in rupee were driven by market forces.

UNI GS RL AS1740

Please Wait while comments are loading...