With inflation touching a five-month high, the Reserve Bank of India, on Tuesday, said its efforts would be focused on containing any spurt in prices and keeping a close eye on developments in Iraq, which have already jacked up oil prices.
Governor Raghuram Rajan also said India had enough foreign exchange reserves and was better prepared to deal with any fallout on the external front.
“(As in) last few months and, I expect, the next few quarters, (RBI) will be primarily engaged in combating inflation,” he told reporters on the sidelines of an SBI event here.
He said: “We are watching the inflation situation. Food prices have had an effect in the last couple of months.”
The Governor hoped food prices would come down with appropriate food management by the government.
“But both the government and the RBI are watching and have to be vigilant in this,” Dr. Rajan said.