RBI Guv expresses concern over excessive rise in food items' prices

Mumbai, Oct 31 (UNI) Reserve Bank of India (RBI) Governor Dr Yaga Venugopal Reddy today voiced his concern over the excessive increase in the prices of various food items that has created the inflationary pressure on the country's economy.

Interacting with the media here today after making the mid-term review of annual policy statement for the year 2006-07, Dr Reddy said that the seasonal movement in the prices of food items had witnessed an unusual increase in recent past.

Disagreeing with the movements in year-on-year inflation, it is observed that prices of primary articles increased 7.3 per cent as on October 14 as compared with an increase of 4.1 per cent a year ago, he said.

Attributing the price rise of the primary articles to the food articles and minerals' getting costlier, RBI Governor said ''it is difficult for me to tell you whether the trend will continue as it all depended on the food production scenario''.

Despite the inflationary trend the country's economy is facing today, he said efforts were being made by the Bank to maintain the current status of inflation, hovering between 5 and 5.5 per cent, for some more time.

Mr Reddy said despite the fact that the oil prices in the global market had gone down, there has been extensive increase in the price of food items in the recent past.

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