ISTANBUL (Reuters) ? India's monetary policymakers are prepared to sacrifice some economic growth in order to control inflation and inflation expectations, H.R. Khan, a deputy governor at the Reserve Bank of India, told Reuters on Wednesday.
The RBI raised interest rates by 25 basis points on Sept 16, the twelfth increase since March 2010, and the tone of the central bank's review was perceived as hawkish with economists expecting another rate rise before the year end, despite plenty of signs that the economy is slowing.
"Most of the time India's growth hasn't fallen below 6 and 6.7 percent, but there is a huge upside to inflation," Khan told Reuters on the sidelines of a financial conference in Istanbul. "In the short term there could be a trade off. But in the medium and long term, low and sustainable inflation is necessary for sustaining the growth."
"So if there is a bit of sacrifice on the growth side we don't mind but inflation and inflation expectations have to be controlled," Khan said.
Khan said an upside to the current global problems lay in the possibility that commodity prices could ease, which could give the RBI cause to reassess its stance.
"Hopefully commodity prices do soften," he said adding, "That would give us some input to think of our stance."
Gross domestic product growth in Asia's third-largest economy slipped to 7.7 percent in the three months through June.
RBI Governor Duvvuri Subbarao defended the 18-month monetary tightening campaign on Monday, calling the country's inflation rate of about 9 percent "inimical to growth."
(Reporting by Seltem Iyigun; Editing by Simon Cameron-Moore)
alphabet hurricane preparedness hurricane preparedness bach ocean city md mean girls honda generator
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.