Food Management, The Only Solution to Curb Price Rise

The CAD is low. And I think one should not worry much on [sic] external environment front,” Rajan said.

Rajan said that going forward the RBI will have to tackle inflation for the next few quarters.

“Last few months and, I expect, the next few quarters will be primarily engaged in combating inflation,” he said.

He outlined two tasks — infrastructure financing and financial inclusion, which the Central Bank will have to deal with in medium term.

“One is ensuring that there is adequate finance for infrastructure and that’s a task on which you will see some policy changes soon, and the second is enabling financial inclusion,” he said.

On impact of Iraq crisis, Mr. Rajan pinned hopes on low CAD and high forex reserve to deal with any exigencies.

Global crude prices soaring to nine-month highs on tension in Iraq mainly weighed on the rupee, which feel to a fresh six-week low of 60.50 against the U.S. dollar in the morning trade.

On the positive side, foreign exchange reserves rose to $312.59 billion as of June 6, and CAD sharply narrowed to 1.7 per cent of the GDP or $32.4 billion in 2013-14 from a record high of 4.7 per cent in FY13.

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--With PTI inputs.