By : Mohan Verma
Reserve Bank of India Governor, Dr. Raghuram G. Rajan convened central bank board members meeting to take stock of possible threat of uncertainty and volatility of rupee on the eve of election counting in the country.
After the meeting he addressed a press conference on Thursday and said that last few days market have seen very buoyant therefore board took the assessment of prevailing situation in the market as it also could respond drastically on the election results.
“It is our job to keep questioning what could happen in the market, RBI discussed how market could respond in wake of various circumstances and uncertainty when election result would come out,” he said.
It was also in touch with SEBI to examine the balance of sudden rise and fall of market as it could impact on the value of rupee further.
RBI could take step to control liquidity of rupees keeping the volatility of market in view, moreover, it had also discussed the balance sheet of some firms during the board meetings to keep stock of situation during the current trend in the market in mind.
“It would also respond to the view of its board members about what we were regularly watching the all possible change in the market and access the situation,” he said.
It also discussed achievement of revenue department as RBI is concerned with currency, monetary policy, the current trend in the GDP, Production and current account deficit.
RBI members also discussed recommendation of Petal committee to keep inflation under control. He said that committee suggests to bring down inflation upto 6 percent at the end of this year, which has already came down upto 8 percent.
The governor said that recent hike in sale price index was due to food side while it was containing the inflation though primary reason inflation are supply side bottlenecks.
But because in the short run it is not possible to address the supply side issues, hence, to keep a tab on inflation there is no other way except following a a tight monitory policy.
Today consumer or the people want us to keep inflation under control as he have decided to bring it down to 6 percent but RBI could keep in its check after changing of interest rate, however, government could curb it after increase of agriculture production and changing supply of such products.
Denying any change in repo and interest rate, Governor said that RBI has decided to not intervene to curb inflation as it would impact the economy at large but he said that value of rupee has slight flips which is not alarming for the RBI to intervene into it.