The Hindu Business Line : Oil prices not too low: RBI

The Deputy Governor of the Reserve Bank of India, Mr Rakesh Mohan, said on Friday that oil prices were not too low even at current levels and there were considerable lags before monetary policy changes had an impact.

Talking to presspersons after the silver jubilee function of the RBI archives, he noted that oil prices were volatile but "by no stretch of imagination, the prices are too low''. He noted that since 1973, oil prices have been volatile and have seen sudden spurts of increase as well as decrease.

He noted that a careful watch would have to be kept. Asked about the GDP rates, Mr Rakesh said the economy had grown at a much faster than the expected annual rate of 8.9 per cent during the first quarter of the current fiscal while the annual inflation rate stood at4.6 per cent. He pointed out that GDP and inflation are welcome numbers. Commenting on the agriculture status, he said it has been stagnant for quite sometime. He pointed out that more attention needs to be given to this sector and a detailed analysis has to be carried out. He added that though monsoons have been better than the predictions, this required special attention from the Government.

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