Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan has underscored the Reserve Bank's latest move for hiking the key lending rate by 0.25 percent a reflection of its ‘strong commitment’ to check inflation. Rangarajan added that the price stability is the main objective of the monetary policy and latest hike may be last in the series of increasing in policy rates if inflation moves along the central bank’s expected direction. The RBI increased the repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 8.0% from 7.75%.
By adding further, Rangarajan asserted that the decision to increase the interest rate is once again reflection of shift in focus from wholesale price inflation to retail inflation, which has been still elevating at close to double digits. The CPI inflation recorded at 9.87% on y-o-y basis in the month of December as against 11.24% in the previous month. While, WPI inflation eased to five month low at 6.16% in the month of December from a year earlier as against 14-month high of 7.52% in November.
Referring to the economic growth, PMEAC Chairman expects that growth rate for the current year to be around 5 percent, and 6-6.5 per cent in next fiscal. Meanwhile, Rangarajan projection for growth was higher than what the RBI has indicated. Central bank projected the GDP growth to be less than 5 percent in current fiscal and around 5.5 percent for next fiscal.
By adding further, Rangarajan asserted that the decision to increase the interest rate is once again reflection of shift in focus from wholesale price inflation to retail inflation, which has been still elevating at close to double digits. The CPI inflation recorded at 9.87% on y-o-y basis in the month of December as against 11.24% in the previous month. While, WPI inflation eased to five month low at 6.16% in the month of December from a year earlier as against 14-month high of 7.52% in November.
Referring to the economic growth, PMEAC Chairman expects that growth rate for the current year to be around 5 percent, and 6-6.5 per cent in next fiscal. Meanwhile, Rangarajan projection for growth was higher than what the RBI has indicated. Central bank projected the GDP growth to be less than 5 percent in current fiscal and around 5.5 percent for next fiscal.
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