RBI Governor likely to meet Chidambaram tomorrow

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A file photo of RBI Governor, D. Subbarao.
A file photo of RBI Governor, D. Subbarao.

Ahead of the monetary policy review next week, RBI Governor D. Subbarao is likely to discuss the prevailing domestic macro-economic as well as global situation with Finance Minister P. Chidambaram tomorrow.

“The meeting between the RBI Governor and the Finance Minister is likely to take place tomorrow,” sources said.

The Reserve Bank will announce the third quarter monetary policy on January 29 amid demands by the industry that it should lower the interest rates to boost industrial output, which contracted by 0.1 per cent in November.

The central bank has kept its policy rates on hold since April on concerns of inflation. However, in its December policy review, it had provided some hint that it may reduce the interest rate (repo rate) in January.

The wholesale price index-based inflation declined to a three-year low of 7.18 per cent in December. However, retail inflation rose for the third successive month to 10.56 per cent in December.

Yesterday, in Hong Kong, Chidambaram had said the RBI must strike a balance between the needs of pushing growth and controlling inflation.

“Our stated position is that RBI must balance between the needs of stimulating growth and containing inflation,” he said.

The Indian economy grew 5.4 per cent in the first half (April-September) of the current fiscal against 7.3 per cent in the corresponding period of 2011-12.

(This article was published on January 23, 2013)
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