Reserve Bank of India likely to continue its baby steps

Bangalore, Jun 15: The Reserve Bank of India is likely to continue its hawkish stance and look towards combating inflation as against nursing the growth momentum in view of the hightened concerns of galloping inflation of over nine per cent.

Economists and bankers feel that the Central Bank in its mid-quarter review tomorrow might continue its baby steps and hike the key rates by a quarter per cent WPI inflation for the month of May was released yesterday and in keeping with the recent spate of upside surprises to market estimates of inflation printed in at 9.06 per cent ( 8.7 per cent month ago and 10.5 per cent a year ago) against expectations of 8.6-8.7 per cent.

However, just as inflation readings seem to be surprising to the upside, growth readings appear to be coming in weaker than expected, according to economists at the HDFC Bank.

Chief Economic Advisor in the Finance Ministry Kaushik Basu felt that the country need to sacrifice growth in the short term like looking for sustaining growth in the long term and hence felt tackling inflation should be a priority and even Economic Advisor to the Prime Minister and former RBI Governor C Rangarajan had spelt out the need for some action by the RBI immediately to check inflation. (UNI -Posted on / )

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