RBI to take more steps to rein in inflation

Friday, 31 December 2010, 04:39 Hrs
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Bangalore:Concerned over the rising inflation, the Reserve Bank of India (RBI) Thursday hinted at taking more steps to check it.

"Inflation is always a concern for us. If measures taken so far are not adequate, more steps will be taken to rein in inflation," RBI Deputy Governor K.C. Chakrabarty told reporters at a bank function.

The annual food inflation based on wholesale prices shot up to 14.44 percent for the week ended Dec 18 from 12.13 percent Dec 11 due to soaring prices of onions, fruits, vegetables, milk, eggs, meat and poultry.

The fresh data on price index, released by the commerce and industry ministry in New Delhi earlier in the day, pegged the annual inflation rate at a 10-week high.

Clarifying the central bank's decision to pause on tightening the monetary policy to tame inflation, Chakrabarty said pause did not mean halt.

"You need to distinguish between pause and halt. Pause is not a halt," the deputy governor said after unveiling the Corp Grameen Vikas Kendra, a branchless banking unit of state-run Corporation Bank at Mallohalli village in Doddaballapur taluk in Bangalore rural district.

Asserting that liquidity was not a problem, Chakrabarty said there were some frictional and structural issues pertaining to settlement.

"Liquidity is not a big problem as all are able to meet their obligation and settlement was taking place in accordance with the system," he pointed out.

The central bank's deputy advised banks to increase their deposits by giving better returns.
Source: IANS
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