RBI will act to rein in inflation: Pranab

“Rising inflation is a matter of concern. The Reserve Bank will take appropriate steps when needed to tame inflation,” Finance Minister Pranab Mukherjee told reporters here.

Spurred by rising prices of essential commodities including food items Wholesale Price Index-based inflation breached the double digit figure by zooming to 10.6 per cent in May this year.

The rising inflation has given rise to widespread apprehension that it may pressurise RBI to tighten supply of money at    its quarterly monetary policy review scheduled on July 27.

Mukherjee, who is understood to be not in favour of any hike in interest rate, indicated that RBI could take appropriate actions to cool down inflationary expectation. However, he expressed optimism that inflation would start moderating from the middle of July.

“Food inflation has started coming down a little bit though not fully. With the expectation of good monsoon and crop inflation would start falling,” he said.  RBI Deputy Governor K C Chakrabarty while admitting that rising inflation was a matter of concern indicated that the apex bank might take monetary action to cool down inflation ahead of the scheduled review of the monetary policy on July 27.  

“We are closely monitoring the pace of inflation. Action by RBI requires detailed examination. After examination if we come to a conclusion that some action is needed now it will be done.”