New Delhi, Jan 13 (PTI) The Prime Minister''s economicpanel today said he favoured "some tightening" of money supplyby RBI later this month in case the prices do not come down asinflation rose to higher than expected level of 8.43 per centin December.
"The inflation rate for December has turned out to bemuch higher than what was originally expected... Given thepresent situation, perhaps some tightening on the part of theReserve Bank may be required," Prime Minister''s EconomicAdvisory Council Chairman C Rangarajan told PTI.The overall inflation for December, measured on the basisof wholesale prices, increased to 8.43 per cent in December,from 7.48 per cent in November.
The Reserve Bank is widely expected to hike key policyrates by 25-50 basis points in its quarterly monetary policyreview meeting on January 25.
RBI raised key policy rates six times last year. But itpaused its rate hiking spree in November review.
Food inflation has remained high through Decembertouching the year high level of 18.32 per cent. It finallyeased somewhat for the week ended January 1 to 16.91 per cent.
"Unless there is some substantial decline in the foodprices in the next two weeks, in my view, perhaps sometightening may be required," Rangarajan said.