Inflationary pressures must be countered: RBI

HYDERABAD: The Reserve Bank today underlined the need to stem rising inflationary pressures without compromising on the growth momentum.

"We must withstand inflationary pressures," RBI Governor D Subbarao said while delivering a lecture on 'India and Global Financial Crisis Collateral Damage and Response'.

Food inflation has crossed 15 per cent in the second week of this month, triggering a debate in Parliament over surging prices of essential commodities.

Replying to a query on the need for another stimulus package by the Government, Subbarao said that the central bank is geared towards supporting growth.

He said the country's growth rate is intact despite economic slump all over the world.

The RBI in its second quarter report projected a growth rate of 6 per cent and inflation is expected to grow to 6.5 per cent by end of this financial year.

He said the country registered 6.7 per cent growth in 2008-09, even as the whole world was reeling under recession.

The RBI Governor said the timing and the sequence to tighten money supply and withdraw stimulus packages are crucial.