RBI, finance ministry talk contingency plan for May 16

The Reserve Bank of India (RBI) has discussed contingency plans with the finance ministry and the stock market regulator to deal with any excessive volatility from election results to be unveiled on Friday.

RBI Governor Raghuram Rajan on Thursday said the central bank will also be ready to deal with any volatility in the rupee.

Rajan was talking to the media after the RBI's board meeting in Shimla.

On inflation, Rajan said food prices were still a concern.

Data on Monday had showed consumer price inflation hitting a three-month high in April, although data on Thursday showed wholesale inflation unexpectedly easing.

Still Rajan noted the RBI is comfortable that the current environment will allow it to meet a consumer inflation target of 8 per cent by the end of the year.

Rajan added inflation, along with growth, the fiscal deficit, and the current account deficit were the four big macro economic challenges the central bank and the new government would have to deal with.

(Reuters)