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RBI To Factor In Inflation For Forming Policy: Subbarao

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Reserve Bank said it will take into account the inflation numbers, which rose in June to 4.86 per cent after four months of decline, while formulating the first quarter monetary policy review due later this month.

"Of course, we will take into account inflation numbers while framing the policy," RBI Governor D Subbarao told reporters after meeting Finance Minister P Chidambaram and other senior officials.

Inflation, which has been a key concern for the RBI, rose to 4.86 per cent from 4.7 per cent a month ago on costlier kitchen items like onion, rice and other cereals.

The central bank is scheduled to announce the first quarter monetary policy review on July 30 amid industry demand of reduction in interest rate to boost sagging growth.

Subbarao further said he had come to New Delhi to discuss the issues concerning the forthcoming G20 Meeting in Moscow later in the week.

"I have come to discuss the G20 issues with the Finance Minister," he said. The meeting lasted for over an hour.

Chidambaram is also scheduled to participate in the G20 meeting of finance ministers and central bank governors to be held in Moscow on July 19 and 20.

Subbarao later had a separate meeting with Department of Economic Affairs Secretary Arvind Mayaram, Chief Economic Advisor Raghuram Rajan and newly appointed Additional Secretary K P Krishnan.

Subbarao is also believed to have discussed the declining rupee and macro economic situation with Finance Ministry functionaries.

Earlier in the day, Chidambaram met Prime Minister Manmohan Singh to discuss the economic situation and is understood to have discussed the rupee woes and economic situation.

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Chidambaram also briefed Singh about his recent Washington visit, where he pitched for US investments in India.

During his US visit, Chidambaram had met key policy makers including Treasury Secretary Jacob Lew, besides heads of various multi-national companies.

Rupee last traded at 59.89 against the US dollar. It had earlier in the month touched an all time high of 61.21 to a dollar.

Among the measures considered by the government to stem the rupee's fall include floating sovereign bonds overseas.

Data released last week showed retail inflation inching up to 9.87 per cent in June, from 9.31 per cent in the previous month, on costlier vegetables and food items.

India's economic gloom deepened on Friday with a surprise drop in industrial output, a fall in exports and higher retail inflation, adding to the central bank's challenge of reviving the economy and supporting the rupee.

Earlier on Monday, the organiser of an event in Mumbai had announced that Subbarao had cancelled a speaking appearance there because he had been called to the capital to meet Chidambaram and Prime Minister Manmohan Singh, although Singh's office later said he had no meeting scheduled with Subbarao on Monday.

It also could not be immediately verified who had initiated the meeting between Subbarao and Chidambaram.


(Agencies)

 


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