The Reserve Bank of India (RBI) on Thursday reiterated that inflation continued to be the primary concern for the central bank as it stayed much above its comfort zone.
“RBI will be looking towards a secular trend of inflation coming down. But anything what RBI will do depends upon how the situation develops. It is not that you see a figure on one day and you come to a conclusion,” Deputy Governor Anand Sinha said.
Sinha, however, refused to comment on whether the central bank would go for a pause in interest rate hike. “Can’t comment (on if RBI will pause hiking rates). RBI has made it very clear, the governor has made it very clear that tackling inflation is a prime concern,” he added.
According to the inflation data released on Thursday, food inflation eased marginally as the index rose 9.03 per cent for the week ended August 6 as against 9.90 per cent in the previous week. However, the fuel price index rose to 13.13 per cent in the year to August 6, as against 12.19 per cent a week earlier.
In a bid to tame the headline inflation, which stood at 9.22 per cent in July, RBI raised the key policy rates 11 times since March 2010. The central bank has projected 7 per cent inflation for March-end and said it was expected to remain elevated for a few more months, before moderating towards the later part of the year. The medium-term projection for inflation is 4.5-5 per cent. In its first-quarter review of the monetary policy, RBI retained its baseline projection for GDP growth at 8 per cent, but said some moderation in growth trend might be underway.
Commenting about the government’s borrowing programme, Sinha said RBI should tackle it in a smooth manner. “RBI will tackle it... Try to make it as smooth and as efficient as it has always done.”