Industry & Economy
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Economy
`Inflation reference point is important'
Our Bureau
Chennai
,
Aug. 11
A FACTOR to be kept in mind when assessing the current inflation rate is the reference point used to calculate it, said Mr Naval Bir Kumar, Managing Director of Standard Chartered Asset Management Company.
"Last year, the base number started moving up in September," he told a press conference during the course of a discussion on the significance of the current inflation rate of 7.51 per cent.
In 2003, the inflation rate increased between September and November. The Economic Survey of 2004 said the increase in energy prices and food articles were the primary reasons for the firm trend then.
The Wholesale Price Index reference point used to calculate the year-on-year inflation rate from the coming September would therefore be higher than the current reference point.
Mr Kumar felt use of monetary measures such as interest rate calibration to combat inflation was more suitable when there was a bubble in the prices of assets. He said the current increase in inflation rate had been caused by an increase in costs.
Mr Kumar was here to promote Standard Chartered Mutual Fund's latest scheme, All Seasons Bond Fund.
He said that the fund's investors were continuously switching between its different debt schemes in an attempt to beat the market.
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