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The Reserve Bank of India (RBI) Governor, Dr D. Subbarao, called on the Finance Minister, Mr Pranab Mukherjee, at the latter's office in North Block on Friday. This meeting comes ahead of the central bank's annual monetary policy announcement slated for next Tuesday.
“As a standard practice, I had come to review the macroeconomic situation with the Finance Minister and senior officers ahead of the monetary policy”, Dr Subbarao told reporters after the meeting.
Impact of inflation
On whether he expects the high inflation to impact economic growth, Dr Subbarao said that such questions will be answered on May 3. The RBI is widely expected to hike policy rates by 25 basis points given the unrelenting inflation. The central bank had increased policy rates eight times since March 2010 to tame inflation.
The wholesale price index (WPI) based inflation had touched near 9 per cent in March, higher than the RBI's projection level of 8 per cent. The current inflation was also higher than the RBI's comfort zone of 5-6 per cent.
In 2010-11, Indian economy had recorded 8.6 per cent growth, according to the advance estimates put out by the Central Statistical Organisation (CSO).
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