JOIN USNegative inflation does not mean deflation, says RBI
“The challenge for the Reserve Bank will be to create the stage for a 9 per cent growth in an environment of price and financial stability ... Our negative inflation does not reflect a demand constraint ...,” RBI governor D Subbarao said in an interview with Central Banking Publications, London.
It is only statistical
“We also look at the inflation expectations survey that we do. So I want to reiterate that the current temporary negative inflation is not structural in nature, but rather it is only statistical,” Subbaro added.Stressing that the country can achieve nine per cent growth in medium term, he said the most important objective of the RBI is returning the economy to a high growth path.India’s growth slowed down to 6.7 per cent last fiscal, a decline of 2.1 per cent from the average growth rate of 8.8 per cent in the previous 5 years.
Dollar to stay as reserve
Mumbai, dhns: The dollar will continue to be global reserve currency for now, RBI Governor D Subbarao has said.
“I have studied the debate about the dollar as reserve currency. At this time I’m not sure if there is a currency that can replace the dollar,” he said clarifying India’s stance on the stability of the current international monetary order. In any case, he continued, replacing the dollar can’t happen by fiat, which has to happen on the strength of that alternate currency.