200-300 bps rate cut possible as inflation falling : ICICI

New Delhi, Nov 16 (UNI) ICICI Bank Chief K V Kamath today said the interest rate is expected to ease by 200-300 basis points in the next 3-6 months, provided the inflation rate continues to move southwards.

''Inflation has fallen to single digit of 8.98 per cent is a good news...if it continues like this, there could be another cut of 200-300 basis points in next 3-6 months,'' Mr Kamath, also CII President, told reporters here on the sidelines on India Economic Summit organised by the World Economic Forum and industry body CII.

He said the inflation rate could further come down to 4-5 per cent level over the 3-4 months, which would give confidence to the Reserve Bank of India to roll back or signal drop in interest rates.

The lower interest rates will boost confidence of India Inc and spur growth, Mr Kamath added.

Amid global meltdown, the biggest challenge before the government is to keep the confidence level high, he said.

Mr Kamath said the country would still grow by around seven per cent during the current financial year and it will not be less than six per cent during the next fiscal.

He expressed satisfaction over the steps taken by the RBI to ease liquidity into the market, saying that its impact will be seen in the coming months.

''We appreciate very much the fact that the government is aware of further challenges and is active in trying to resolve them,'' Mr Kamath said.

UNI SBA/MP SG SK KP1700