Countering inflation not to sacrifice growth: Y V Reddy

Pune, June 23 : Reserve Bank of India (RBI) Governor Yaga Venugopal Reddy today said that the growth of the nation would not be sacrificed while dealing with inflation and the central bank would take more steps to counter it.

Speaking at a function in Pune, Reddy said that all options to curb inflation were being examined in wake of relentless surge in the global crude prices.

The central bank expects the economy to grow 8- 8.5 percent in the current fiscal year that ends in March 2009, but some analysts say growth could moderate due to a tight monetary policy aimed at curbing inflation.

The oil price hike and the rising prices of food items have contributed to inflation.

This is the highest level of inflation during the United Progressive Alliance (UPA) regime. The annual inflation rate for the week ended August 28, 2004, was 8.74 per cent.

On June 4, the Central Government upped the price of petrol by Rs 5 a litre and that of diesel by Rs 3 a litre. The price of a Liquefied Petroleum Gas (LPG) cylinder was increased by Rs 50. Price of kerosene was left untouched.

Inflation rate hit a 13-year high of 11.05 percent on June 20, raising expectations of further action from the central bank to tame prices.

The central bank made a surprise 25 basis point increase in its repo rate, the rate at which banks borrows from the RBI, to eight percent on June 11, the first rate rise in more than a year.

ANI