Reserve Bank of India governor Duvvuri Subbarao on Tuesday said he was happy with the country?s GDP growth in 2009-10 but concerned about inflation.
?Inflation is not at its peak but it is still higher than we would like it. So we will have to take into account inflation concerns along with growth,? Subbarao said in Pune.
?Growth has been encouraging but not surprising. In our annual policy statement in April, we had said it would be 7.5% so it is within that range,? the gover-nor added.
However, he refused to discuss policy issues except saying that the central bank would take into account the growth numbers as also other developments, both at home and around the world, while for-mulating monet-ary policy.
On the possible impact of the euro crisis, Subbarao said there was no problem at all with regard to India?s external sector position because of the situation in Greece. ?Our forex reserves are quite comfortable and they should be able to help us tide over any sort of contingencies. As far as the management of foreign exchange is concerned, we do not really discuss any shifts from the euro to the dollar or vice-versa. Our forex reserves are very carefully and very efficiently managed with the help of experts,? he said.
He observed that the flight to safety and to dollars was a part of a natural reaction in the financial markets to shift to safety at a time of uncertainty. ?That is what we have seen in our country as well and I don?t think we need to be overtly concerned about it,? he added.
Subbarao was interacting with the media after inaugurating the Archives Museum on the evolution of the Reserve Bank of India between 1935 and 2010 at the RBI College of Agricultural Banking in Pune.
