Giving no hope of a rate cut in its forthcoming policy review, the Reserve Bank of India, on Thursday, said it would assess growth, inflation and the external situation before taking a view, while still according priority to controlling ‘high’ inflation.
RBI Governor D. Subbarao presented an uncertain outlook for the economy, saying it was difficult to predict when global conditions affecting the rupee would ease.
Speaking at an “outreach” programme near here, he said he would assess growth, inflation and the external situation while taking a view in the upcoming policy on July 30.
The central bank would accord priority to controlling inflation, which still remained ‘high’, Dr. Subbarao said.
“The rupee depreciation over the last six weeks has been because of global factors...It is difficult to say how long that effect will persist because it is factors beyond our control,” he told reporters here.
The rupee has declined by about 9 per cent in the past three months and had touched a record low of 61.21 to the dollar on July 8. The currency recovered after the RBI and SEBI announced measures to curb volatility and speculation in the currency derivative market.
The RBI’s efforts to contain inflation have yielded fruit, with the wholesale price index declining to 4.7 per cent, the lowest in over three years. However, retail inflation stood at 9.31 per cent in May. The current account deficit remained high, Dr. Subbarao said.