The bankers who met in Mumbai at the office of Indian Banks’ Association (IBA) on Wednesday have expressed concern over the fact that the risk of inflation is visible again as there has been a rise in prices of commodities in the recent weeks.
This is despite the fact that the inflation has already fallen below 4% and was in the comfort zone of the RBI projections. These issues will be taken up with the Reserve Bank of India when an IBA team calls on RBI governor Y V Reddy on October 4 as a run-up to the forthcoming review of half-yearly monetary policy to be announced in October.
Bankers are also of the view that the rupee rise is likely to continue for some more time and in case RBI doesn?t intervene in the money market, the rupee may breach the 40-level by the year-end. Some of the other issues that were discussed by the bankers during the meeting of the monetary policy group of IBA here on Wednesday include foreign exchange inflows after curbs imposed by the RBI on ECB (external commercial borrowings). Talking to FE, K Unnikrishnan, deputy chief executive officer, IBA, said, ?The monetary policy group of IBA, which met and discussed various issues relating to the current scenario of the Indian economy.? The group comprises bankers looking after departments like treasury and bank economists. The monetary policy group, which is headed by HN Sinor, chief executive of the IBA, will meet the RBI?s governor and top officials soon. ?In fact, today?s meeting was held to prepare a backgrounder for the forthcoming meet,? said Unnikrishnan.