'RBI will not hike rates untill economy recovers'

Posted By: Staff
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New Delhi, Sep 16: The Reserve Bank of India (RBI) will not raise monetary policy rates untill economy is back on high-growth track, RBI Governor Duvvuri Subbarao said on Tuesday, Sep 15.

"We will not exit the expansionary monetary policy unless we are sure that recovery is secured... but soon after the recovery is secured, we have to unwind the accommodative monetary policy," Mr Subbarao said.

According to Subbarao, RBI will look at a number of factors like the wholesale price index (WPI)-based inflation, consumer price index (CPI)-based inflation, components within inflation, while unwinding the soft monetary policy.

"This question of exit will be upon us much sooner than most of the country. We have to take a call on supporting the recovery and stemming inflationary pressure," he said.

Pointing out that negative WPI inflation is statistical in nature, Subbarao said, "There are inflationary pressure this fiscal ...and CPI inflation is in double digit."

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