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Our Bureau

New Delhi, July 25 Ahead of the first quarterly monetary policy review for 2008-09 on July 29, the Reserve Bank of India Governor, Dr Y.V.Reddy, met the Union Finance Minister, Mr P. Chidambaram, at the latter’s North Block office here on Friday.

Dr Reddy declined to take questions from the media. The meeting, which is a customary one before the review, lasted nearly an hour. This meeting comes at a time when expectations are high that the central bank would go in for further tightening of monetary policy to tame the double-digit inflation in the economy.

The RBI Governor has been holding frequent meetings with the Finance Minister in the wake of inflation situation. This is his second meeting in the last fortnight.

The Finance Ministry, which had already taken a slew of fiscal measures to tame inflation, is of the view that monetary policy was the first line of defense against inflation. It is also of the view that some growth may have to be sacrificed to tame inflation, which is well above the RBI’s comfort zone of 5-5.5 per cent.

The UPA Government is still to come to grips with the inflation, which is at a 13-year high level. There has, however, been some softening in the international oil prices in the recent days, which may be of some comfort for policymakers here.

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