RBI will take all steps to contain inflation: Mohan
Deputy Governor Rakesh Mohan said it will adopt all necessary monetary measures to maintain price stability in the country.business Updated: Nov 22, 2007 15:02 IST
Concerned over rising oil and food prices in the global market, the Reserve Bank on Thursday said it would adopt all necessary monetary measures to maintain price stability in the country. <b1>
"RBI's main objective remains price stability, financial stability and maintenance of high growth through adequate provision of credit. We will use all monetary instruments as and when necessary (to meet the objective)," its Deputy Governor Rakesh Mohan said at a business conference in New Delhi.
Inflation stood at 3.11 per cent for the week ended on November 3, compared to 2.97 per cent a week ago, mainly due to rise in prices of food articles, petroleum products and manufactured items.
Mohan said Food and Agriculture Organisation (FAO) of the United Nations has predicted that food prices would be rising at a higher rate in the next 5-10 years than in the past, adversely impacting those economies that have higher weight of food items in price levels.
In India, food items account for 57 per cent in Consumer Price Index and 26.94 per cent (primary and manufactured products) in the Wholesale Price Index that is used to measure inflation.
Finance Minister P Chidambaram said in Parliament this week that prices of essential commodities have gone up by around 25 per cent during the past one year.
Referring to rising crude oil prices, which crossed 99 dollars a barrel yesterday, Mohan said the apex bank would maintain its policy views expressed in the Mid-Term monetary review on high oil and food prices.