DAVOS: Ahead of the monetary policy review by Reserve Bank, Finance Minister P Chidambaram if interest rates were a dampener to growth, appropriate response would be ensured."Our interest rates are set in order to contain inflation but if (high interest rate) is a dampener to growth, we will respond through appropriate fiscal and monetary measures," Chidambaram, who is here to attend the World Economic Forum, told reporters.Admitting that there could be an indirect impact of the financial crisis in the US, whose central bank just cut interest rates to keep the economy from slipping into recession, he said the government was, however, not in favor of putting curbs on capital (inflow).

The drastic rate cut in the US would have consequences for India, including higher capital inflow and faster appreciation of the rupee.Despite the fears of global recession the Indian economy is set to grow by a healthy 8.5 per cent next fiscal, the finance minister said, but sounded caution that high interest rates may have an impact on the growth trajectory.

The Reserve Bank of India is due to review its monetary policy stance on January 29. The scheduled quarterly review comes on the heels of a surprise 75 basis points cut in interest rates by the US Federal Reserve.