Economy on 'self-accelarated mode': Reddy

Mumbai, Apr 27: The Reserve bank of India (RBI) today viewed the current account deficits as under-manageable limits and said the higher inflation rates can be contained with the execution of RBI monetary policies announced on Tuesday.

Dr Yaga Venugopal Reddy, RBI governor, said the domestic economy is on a ''self accelerated'' mode and the authorities are confident to mange risks from foreign markets on account of the high foreign reserves.

''We have an economy that is growing in an unprecedented manner along with maintaining price stability. Around 98 per cent of the investments during the past five years have been financed by the domestic savings,'' he said.

Dr Reddy said if the country aspires for higher economic growth, the inflation rates must be aligned with the international economy to strenghten its financial sector.

The domestic banking system must be improved to benefit the interests of poor people so the reforms in financial sectors reach each and every citizen of the country, he added.

Addressing a conference today, Dr Reddy said the thrust of financial sector reforms in the country was ''gradualistic'' and reforms have brought an inherent strength and development to the sector during these period.

''The economical imbalance is much more visible in countries like America and China as compared to India since we have been experiencing a stable growth accompanied by price stability,'' he said.

Dr Reddy said it is the need of the hour to have a look at the constant balance between financial and external markets in the domstic economy.

Referring to the issue of inflation, Dr Reddy said there were no targets set four years back to control the inflation and the present targets are self imposed.

However, the inflation rates must be brought down to desrable levels for a much stable growth, he added.

UNI