RBI follows balanced approach in policy review: Montek

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RBI follows balanced approach in policy review: Montek
The Planning Commission deputy chairman Montek Singh Ahluwalia on Friday said Reserve Bank of India (RBI) has adopted a balanced approach in policy review by easing liquidity while taking measures to bring down the inflation.

RBI governor Raghuram Rajan announced his maiden policy review on September 20 and hiked the repo rate by 25 bps to 7.5 per cent while easing the liquidity by reducing the marginal standing facility rate for banks.

"I think it is a quite balanced statement actually. He (RBI Governor) has done something which will ease liquidity and at the same time try to send the signal that RBI is concerned about bringing inflation down. You need to give both those signals. It is right thing to do," Ahluwalia told media.

"..the good monsoon would certainly help. It is not the case that the inflation is comfortable at the moment. Overall, I would say that we need to be watchful of inflation. I don't think we can assume that the inflation problem is firmly behind us. It could get better in next three or four months," he added.

Dion Global Solutions Ltd.

Story first published: Friday, September 20, 2013, 21:50 [IST]
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