Managing prices is our main priority, says RBI

Kolkata, July 4, PTI,

Jul 04 2010, 22:31 ist
updated: Jul 04 2010, 22:31 ist

Managing prices is our main priority, says RBI

RBI Deputy Governor K C Chakrabarty (left) with Assocham Vice President A N Dhoot at the conference on Banking & Beyond — Power of Financial Inclusion, in Kolkata, on Sunday. pti

“For RBI inflation is everything... for (finance) ministry, it is growth. But in the long run, both will converge... inflation is the biggest enemy,” RBI Deputy Governor K C Chakrabarty told reporters on the sidelines of an Assocham function here.

The RBI, on Friday evening, weeks before its scheduled policy review on July 27, raised the short-term lending and borrowing (repo and reverse-repo) rates by 25 basis points to 5.5 per cent and 4 per cent, respectively, to check rising inflation.

“We don’t increase anything by less than 25 basis points. In that, it is a baby step,” Chakrabarty said, justifying the decision of the central bank to go in for a mid-course policy correction.

On the possibility of more monetary action by the RBI on July 27, he said, “There may be or not be. Currently it is in the internal debate stage. I cannot disclose it.”

On whether RBI had different views than what is being advocated by finance ministry, he said, “We can have different views. Monetary policy authority and the (finance) ministry can differ. Even if we take anti-inflationary measures, it does not mean that we are against growth. Immediately, growth might suffer, but in the long-term, there will be inclusive growth,” he added.