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Despite corrective measures, rising inflation remains a “matter of concern” for the Reserve Bank of India (RBI). The country's apex bank is likely to come out with new steps to tackle inflation in its annual monetary policy review, Ms Shyamala Gopinath, Deputy Governor, RBI, said here on Monday.
Inflation in March stood at 8.98 per cent, almost one percentage point higher than the RBI's prediction; the monetary policy review is scheduled for May 3.
Speaking on the sidelines of an interactive session organised by the RBI, Ms Gopinath said: “We will have our own policy very soon. Inflation remains a matter of concern and we need to evaluate and underline the inflationary pressures.”
She, however, did not mention whether the possible policy steps would lead to another round of interest rate hikes.
She pointed out that monetary policies take 12-18 months to have an effect on the economy.
Spill-over effect
According to Ms Gopinath, the current inflationary pressure has been a result of a spill-over in inflation from the food to the non-food manufacturing sector.
Inflation data for the week ended April 2 show food inflation at 8.28 per cent.
“We will have to mark these trends and then see to it that there is no demand-supply mismatch,” Ms Gopinath said.
Pointing out that capital account convertibility is a process and not an event, the senior bureaucrat said that it is dependent on several preconditions being met.
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