Rajan Says RBI To Battle Inflation In Coming Few Quarters

(RTTNews) - Reserve Bank of India Governor Raghuram Rajan said on Tuesday that the central bank will continue to fight high inflation in the coming few quarters.

The bank is watching inflation and remains vigilant on the same, Rajan said on the sidelines of a banking conference in Mumbai.

"Food prices have had an effect in the last couple of months," the central bank chief said. Official figures showed yesterday that wholesale price inflation hit a five-month high of 6.01 percent in May, largely led by food prices.

Appropriate food management may help in lowering food prices, Rajan noted. The prospect of weak monsoon and the impact of the Iraq turmoil on oil prices risk fueling India's inflation further.

The central bank is monitoring the Iraq situation Rajan said, and he assured that the country is in a better position to withstand any external shocks as it has sufficient reserves and the current account deficit remains low.

"As far as the external front goes, we are in a much better position than we were last year," Rajan said. There was no need to worry regarding the external side as of now, the policymaker added.

With crude prices rising amid the violence in Iraq, the rupee fell to 60.55 a dollar, earlier on Tuesday, the weakest level since April 29. The currency strengthened thereafter, ending two days of fall, as exporters apparently sold dollars.