Noting that there is some progress in monsoon, which has a direct bearing on inflation, over the last 2-3 days, RBI Deputy Governor Subir Gokarn said, "It is a fact we will obviously pay close attention to as we go into our policy date."
Talking to reporters on sidelines of a seminar here, he said RBI cannot make judgements on the progress of monsoon and it would rely on the Meteorological Department for forecast.
For monsoon rains, the first two weeks of July are quite significant, he said.
"We are still in the early part of that period. So, we are watching, as everybody else is, to see what progress it is making... If there is a problem, we will take it into our consideration," he said.
RBI is scheduled to announce its first quarter review of monetary policy 2012-13 on July 31.
Monsoon is considered lifeline of Indian economy as about 60 per cent of the country's cultivable land is not irrigated.
In its mid quarter policy review on June 18, RBI had kept the interest rate unchanged citing inflationary concerns and worsening global situation, among other reasons.
The status-quo instance of RBI had evoked sharp reaction from India Inc which was expecting rate cut to boost growth.
According to IMD, India's monsoon appeared set to march ahead this week, as weather conditions were favourable for advance of the seasonal rains into parts of Maharashtra, Gujarat and Madhya Pradesh.
On the current account deficit (CAD) which touched a record high of 4.2 per cent of GDP in 2011-12, Gokarn said, "The capital inflows are not matching (the expectations) and putting pressure on the rupee".
