RBI likely to continue with tight monetary policy

Prime Minister’s Economic Advisory Council (PMEAC) Chairman C Rangarajan today said the RBI will have to continue with its monetary tightening policy to tame inflation, which stood at over 8 per cent in February. “The inflation rate continues to remain high and therefore, monetary policy will have to remain tight in order to ensure that the inflation rate is brought down,” Rangarajan told reporters on the sidelines of the Skoch summit here.

The Reserve Bank of India has revised key policy rates eight times since March, 2010, to tame inflation.

In its mid-quarterly policy earlier this month, the central bank raised the short-term lending and borrowing rates by 25 basis points. The RBI is slated to come out with its quarterly policy review on May 3.

He further said overall inflation is likely to decline to 7.5 per cent in March from 8.

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