Changed economic environment, both domestically and globally, has prompted the Reserve Bank to scale up its monetary intervention though there has not been any material change in the domestic economy since the last monetary action, RBI deputy governor Rakesh Mohan has said.
On June 24 the central bank had raised its cash reserve ratio (CRR) and repo rate by 50 basis points each in its bid to contain inflation which crossed 11% mark recently.
Mohan, while talking to reporters on the sidelines of Statistics Day and annual conference on financial statistics held by the RBI in Mumbai on Tuesday, said there was no material change in the domestic economy since June 24.
Prior to it, while addressing the seminar, Mohan said that there was a need for constant monitoring of macroeconomic developments in the country.
?Given the change in economy situations, all central banks (of other countries) have stepped up their monetary activities…We (RBI) have also stepped up our monitoring .? there is a need to constantly monitor the developments,? Mohan said. Policy actions that will have an impact on interest rates will work only if other segments like the labour and capital markets operate well which requires timely availability of data and right understanding of indicators like inflation, said Mohan.
RBI has set up a technical advisory committee to assess the true meaning of inflation, informed Mohan. The country?s inflation has touched the mark of 11.42% for the week ended June 14. The RBI was likely to review its annual monetary policy on July 29.
