The Asian Development Bank (ADB) on Tuesday said it expected the Reserve Bank of India (RBI) to maintain a tight monetary stance for 2014-15, as retail inflation might ease only moderately in the year.
"We expect monetary policy to remain fairly tight," ADB India Senior Economics Officer Abhijit Sen Gupta said. The Manila-based multilateral lending agency said it expected Consumer Price Index (CPI)-based inflation to moderate from an average of 9.8 per cent in 2013-14 to 8.7 per cent in the current financial year and to 7.8 per cent in 2015-16. The predictions were based on the assumption of normal rains. When asked why ADB expected the RBI to continue with its tight monetary stance when retail inflation was likely to decline in the current financial year, Sen Gupta said, "But over eight per cent retail inflation is also higher than the RBI's comfort zone."
"We expect monetary policy to remain fairly tight," ADB India Senior Economics Officer Abhijit Sen Gupta said. The Manila-based multilateral lending agency said it expected Consumer Price Index (CPI)-based inflation to moderate from an average of 9.8 per cent in 2013-14 to 8.7 per cent in the current financial year and to 7.8 per cent in 2015-16. The predictions were based on the assumption of normal rains. When asked why ADB expected the RBI to continue with its tight monetary stance when retail inflation was likely to decline in the current financial year, Sen Gupta said, "But over eight per cent retail inflation is also higher than the RBI's comfort zone."