Highlights of RBI Reddy's remarks on inflation, interest rates

[N.Sukumar]

Highlights of RBI Reddy's remarks on inflation, interest rates
Monday, Jun 23

PUNE - Below are the highlights of comments on inflation and
interest rates by Reserve Bank of India Governor Y.V. Reddy at a
function organised by the National Institute of Bank Management here.
India's headline inflation rate had hit a 13-year high of 11.05%
in the week ended Jun 7 from 8.75% a week earlier, triggering fears of
further monetary tightening by the central bank.
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INFLATION
* Legitimate concern on inflation front.
* Price pressure on oil price not entirely unanticipated.
* Fuel price main, though difficult problem.
* Inflation expectation need not hurt growth.
* High level of oil prices may not be temporary.
* Approaching oil price impact on Wholesale Price Index in calm way.
* Must adjust to high, volatile oil prices
* Pass-through of oil prices not continuous.
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INTEREST RATES
* To have more internal assessment to mull RBI steps.
* RBI to moderate, manage aggregate demand.
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