RBI to keep close vigil on inflation: Reddy

Y V Reddy, Governor of Reserve Bank of India (RBI), said the rise in inflation in April was "not fully unanticipated" and addded that the central bank will maintain a "close vigil" over prices considering uncertainties over oil prices.

"The overall inflation level noticed during the month of April is not fully unanticipated, and hence not inconsistent with our inflation projection of 5-5.5% anticipated for 2005-06," Reddy said. "A close vigil will be maintained over prices," he added.

Barring uncertainties on the oil front, both with regard to international and domestic prices, annual policy projection on inflation remains valid at this stage, Reddy said.

Inflation based on the wholesale price index (WPI) rose to 5.91% during the week ended April 23 from 5.64% a week ago.

Reddy said the increase in prices during the week under review for certain commodities like tea (24%), fruits and vegetables (5%), furnace oil (4%), and metals (1.6%) have been significant.