Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

RBI maintains balance between inflation, growth: Raghuram Rajan

May 27 2014, 18:34 IST
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RBI Governor Raghuram Rajan said the central bank has always maintained the balance between growth and inflation. RBI Governor Raghuram Rajan said the central bank has always maintained the balance between growth and inflation.
SummaryRBI has always maintained the balance between growth and inflation: Raghuram Rajan.

Reserve Bank Governor Raghuram Rajan today said fighting price rise is a priority and the central bank has always maintained balance between the need to check inflation and prop-up growth.

"It is absolutely a task that the government and the RBI are engaged (in fighting inflation)," Rajan told reporters after meeting new Finance Minister Arun Jaitley here.

"RBI has always maintained the balance between growth and inflation," Rajan said, adding that the central bank would continue to do so.

The meeting, which comes just days before the next bi-monthly monetary policy review on June 3, lasted for about 50 minutes.

Soon after taking charge of the Finance Ministry today, Jaitley pledged to contain price rise.

Amid the RBI maintaining high interest rate regime to tame inflation, Jaitley at his media interaction stressed upon the need of a "balancing act" to deal with the declining growth and high inflation.

A persistent decline in industrial production and a surge in inflation poses big challenge for the new BJP government, led by Prime Minister Narendra Modi, which assumed office today.

While industrial production shrank for the second month in a row, contracting 0.5 per cent in March, retail inflation surged to a three-month high of 8.59 per cent in April.

Industry leaders meanwhile have been clamouring for low interest rates to spur growth.

On the Current Account Deficit (CAD), which sharply narrowed to 1.7 per cent of GDP in 2013-14, Rajan said "yesterday's number was very healthy".

When asked about easing of curbs on gold imports, the Governor said: "You will see policies as they are rolled out".

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