Financial Daily from THE HINDU group of publications
Thursday, Oct 28, 2004
Financial Daily from THE HINDU group of publications Thursday, Oct 28, 2004 |
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Industry & Economy
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Economy `RBI keeping close watch on consumer price index' Our Bureau
Mumbai , Oct. 27 THE Reserve Bank of India (RBI) is closely monitoring the increase in the consumer price index, according to Dr Rakesh Mohan, Deputy Governor, RBI. ``The increase in the wholesale price index (WPI) is mostly supply-related. We do see some increase happening in consumer prices. We need to be careful about the transmission of these prices through the supply chain to the consumer price index," said Dr Mohan, speaking at a meeting organised jointly by the Bombay Chamber of Commerce and the Fixed Income Money Markets and Derivates Association on Wednesday. The Central bank has to be conscious and take action accordingly. The RBI's focus will be on maintaining price and financial stability and growth momentum, he added. In its mid-term review of the Annual Policy Statement on Tuesday, the RBI had revised its inflation estimates to 6.5 per cent for the current fiscal, from the earlier forecast of five per cent. Dr Mohan said that the Central bank's medium-term view on domestic inflation remains unchanged despite a recent surge in prices, due to which it raised only the repo rate, which is a short-term policy rate, and not the bank rate, which is a medium-term signalling tool. In its mid-term review of the Annual Policy statement, the apex bank hiked the repo rate to 4.75 per cent from 4.50 per cent. The bank rate was left untouched at six per cent.
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