Expressing concerns over high inflation, Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty today termed the situation as difficult yet manageable.
“Inflation is a difficult situation but manageable,” he said on the sidelines of an event in Mumbai. Owing to the rising food prices, the wholesale price index — India’s inflation indicator —rose to 8.43 per cent in December, as agsinst 7.48 per cent a month ago. Food inflation had remained at high levels, with an annual increase of 16.91 per cent in the week ended-January 1.
This has fueled speculation the central bank would raise policy rates by at least 25-50 basis points in its upcoming third quarter monetary policy review. A few days ago, RBI Governor D Subbarao had expressed concerns over high inflation. “A lot of countries are still flirting with deflation...still concerned they might have deflation. On the other hand, we have a surging inflation,” said Subbarao.
He added the central bank was “desperate” to control the same. He also said RBI had to calibrate its policy to manage the escalating prices while supporting economic recovery.