Saturday, March 5 2005 14:44 Hrs (IST) - World Time -

New Delhi: The Finance Ministry and the Reserve Bank of India (RBI) will work together to ensure price stability and benign interest rates in the economy, Finance Minister P Chidambaram said today (Mar 5, 2005).

"I have requested and promised the RBI board to work with it to ensure price stability. I also requested the RBI to ensure that interest rates remain benign," he said after a customary post-budget meeting with the RBI board.

Government and the RBI want to keep interest rates benign so that banks can lend funds to industry and agriculture at "competitive" rates, the Finance Minister said.

He described the one-and-a-half-hour-long meeting with the RBI board as "productive".

The statement from the Finance Minister comes at a time when inflation touched a 40-week low of 4.83 per cent during the week ended February 26, while interest rates have stabilised.

The RBI's benchmark bank rate now stands at 6 per cent, while prime lending rates of banks are at about 9-10 per cent.