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Govt, RBI working together to check inflation: Pranab

PTI     July 14, 2011
Expressing concern over rising inflation, Finance Minister Pranab Mukherjee on Thursday said both the government and the central bank are working in tandem to bring it down to a comfortable level.

"The government is working together with the Reserve Bank of India (RBI) to take appropriate steps to reduce inflation to more comfortable level," Mukherjee said while reacting to the June headline inflation that soared to 9.44 per cent from 9.06 per cent in the previous month.

The statement comes amid wide belief that RBI will continue with its anti-inflationary measures and hike interest rates by at least another 25 points at its quarterly review on July 26.

RBI has hiked interest rates 10-times since March 2010 in its bid to check inflation even at the cost of growth.

Mukherjee said inflation figures reported for the month of June "continues to be matter of concern" and asserted that the government was "monitoring the price situation closely."

Inflation has been over 9 per cent since December 2010.

While the Finance Minister's statement did not elaborate on what the comfortable level for inflation is, according to the RBI the rate of price rise should ideally be 4-5 per cent.

The rise in June Wholesale Price Index (WPI) inflation is attributed to increase in fuel prices effected on May 24, besides seasonal factors and an upward movement in mineral and manufactured prices.

While the general inflation has shown an increase, the index for food inflation almost remained flat in June month-on-month.

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