<p>"Clearly there is a new risk to oil prices emerging from the current situation (in Egypt) and we have to watch that," RBI Deputy Governor Subir Gokarn told reporters here.<br /><br />In the wake of these risks, he said the RBI will stick to anti-inflationary measures, which in turn could result in high interest rate for borrowers of all types of loans.<br /><br />When asked if the RBI may go for another round of hike in the short term borrowing and lending rates, Gokaran said "Our monetary policy stance is anti-inflationary".<br /><br />His reaction comes at a time when the headline inflation rose to 8.43 per cent according to December figures and food inflation went above 17 per cent for the week ended January 22.<br /><br />The situation has further detoriated due to the political unrest in Egypt, which has reulted in global crude prices spiralling to a over two year high.<br /><br />The oil prices had crossed USD 102 per barrel last week and experts have expressed concern over further jump as unrest spreads to other countries in the Middle East.<br /><br />"We had projected in our quarterly review about the upside risk to inflation coming from commodity prices, including energy prices. There is obviously a risk that the situation will translate into higer commodity prices," he added.<br /><br />Gokarn however added that the Reserve Bank would for the time being stick to its estimate of 7 per cent inflation by March end as it had already taken into account the actual price rise till end of January in its monetary policy review last month.<br /><br />"What is happening now may be persistent, may be transitory (current high prices)...so it is still in a sense a worry. For the moment we will stay with 7 per cent inflation by end of March," he added.<br /><br />Gokarn further said that ongoing food inflation is driven by commodities that are not monsoon senstives. "That suggest that there is structural element (to inflation)," he added.<br /><br />The inflation data for January 22 revealed that wheat and cereal prices have moderated over the previous year but vegetables prices soared during the period under review.<br /><br />Asked about the central bank's response to the GDP estimate released earlier in the day, Gokarn said, "Our outlook for 2010-11 was 8.5 per cent with an upward bias which reflects the base. It is consistent with the current projections (of 8.6 per cent)."</p>
<p>"Clearly there is a new risk to oil prices emerging from the current situation (in Egypt) and we have to watch that," RBI Deputy Governor Subir Gokarn told reporters here.<br /><br />In the wake of these risks, he said the RBI will stick to anti-inflationary measures, which in turn could result in high interest rate for borrowers of all types of loans.<br /><br />When asked if the RBI may go for another round of hike in the short term borrowing and lending rates, Gokaran said "Our monetary policy stance is anti-inflationary".<br /><br />His reaction comes at a time when the headline inflation rose to 8.43 per cent according to December figures and food inflation went above 17 per cent for the week ended January 22.<br /><br />The situation has further detoriated due to the political unrest in Egypt, which has reulted in global crude prices spiralling to a over two year high.<br /><br />The oil prices had crossed USD 102 per barrel last week and experts have expressed concern over further jump as unrest spreads to other countries in the Middle East.<br /><br />"We had projected in our quarterly review about the upside risk to inflation coming from commodity prices, including energy prices. There is obviously a risk that the situation will translate into higer commodity prices," he added.<br /><br />Gokarn however added that the Reserve Bank would for the time being stick to its estimate of 7 per cent inflation by March end as it had already taken into account the actual price rise till end of January in its monetary policy review last month.<br /><br />"What is happening now may be persistent, may be transitory (current high prices)...so it is still in a sense a worry. For the moment we will stay with 7 per cent inflation by end of March," he added.<br /><br />Gokarn further said that ongoing food inflation is driven by commodities that are not monsoon senstives. "That suggest that there is structural element (to inflation)," he added.<br /><br />The inflation data for January 22 revealed that wheat and cereal prices have moderated over the previous year but vegetables prices soared during the period under review.<br /><br />Asked about the central bank's response to the GDP estimate released earlier in the day, Gokarn said, "Our outlook for 2010-11 was 8.5 per cent with an upward bias which reflects the base. It is consistent with the current projections (of 8.6 per cent)."</p>