Inflation expected to be between 5-5.5% this fiscal
The Reserve Bank of India on Thursday said it sticks to its projected estimates of inflation to be between 5-5.5 per cent and GDP in the range of 7.5-8 per cent during the current fiscal.
By PTI |
NEW DELHI: The Reserve Bank of India on Thursday said it sticks to its projected estimates of inflation to be between 5-5.5 per cent and GDP in the range of 7.5-8 per cent during the current fiscal.
"There has been slight increase in prices of few commodities but it does not warrant RBI to alter its expectations on inflation rate for the current fiscal," RBI Governor Y V Reddy told reporters on the sidelines of a conference on financial education.
He said price increase in a few commodities has been a cyclical component but the overall effect on inflation is likely to be "so marginal".
He said unless prices of petroleum eases down on a sustainable basis, inflationary estimates will remain same.
"As you have noticed we always make distinction between permanent component and non permanent components of oil. We still believe that permanent components continue to be what we broadly judge as it would be," he added.
He, however, said inflationary expectations remain a cause for worry. "We are most concerned about inflationary expectations."
He said liquidity in the economy is comfortable as RBI continues to absorb it.
Reddy also added that the government borrowings programme and its fiscal deficit are expected to be as per the budget targets.
The central bank keeps monitoring international interest rate movement, but there is no one to one correspondent between them and interest rates in India.
"There has been slight increase in prices of few commodities but it does not warrant RBI to alter its expectations on inflation rate for the current fiscal," RBI Governor Y V Reddy told reporters on the sidelines of a conference on financial education.
He said price increase in a few commodities has been a cyclical component but the overall effect on inflation is likely to be "so marginal".
He said unless prices of petroleum eases down on a sustainable basis, inflationary estimates will remain same.
"As you have noticed we always make distinction between permanent component and non permanent components of oil. We still believe that permanent components continue to be what we broadly judge as it would be," he added.
He, however, said inflationary expectations remain a cause for worry. "We are most concerned about inflationary expectations."
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He said liquidity in the economy is comfortable as RBI continues to absorb it.
Reddy also added that the government borrowings programme and its fiscal deficit are expected to be as per the budget targets.
The central bank keeps monitoring international interest rate movement, but there is no one to one correspondent between them and interest rates in India.
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