Stating commodity prices have increased, Reserve Bank of India Governor D. Subbarao, on Wednesday, asserted that fighting inflation was the top priority, a remark that could dash hopes of a rate cut later this month.
To specific questions on the possibility of a rate cut, Dr. Subbarao, however, told reporters that he did not want to speak on the issue as of now.
Anything about this would be known on January 29 monetary policy review report, he added.
“Controlling inflation is our most important work,” he said, while addressing an outreach programme of the central bank at Lalpur Karauta village here.
Prices of almost every commodity, especially edibles and cloths, had registered an increase and inflation had affected every section of the society, particularly the poor, he said.
“In the last two years, we have been successful in controlling inflation to some extent, but I admit the rate is still high. To control inflation is and will remain our priority,” he said.
“If you see the currency note, it is printed on it that ‘I promise to pay the bearer the sum of Rs.100’, and it has my signature as the RBI Governor. What does that promise and signature mean? It means that the RBI will control inflation and maintain its purchasing power,” he said.
The Governor also said financial inclusion was an important developmental programme of the RBI.