RBI ‘on course for inflation targets’

NEW DELHI: India’s central bank governor said Sunday the country was on course to meet the bank’s targets on reduced inflation, adding that it was working with the new government on monetary policy.
Reserve Bank of India (RBI) governor Raghuram Rajan said the bank had started discussions with Prime Minister Narendra Modi’s government on a monetary policy framework that includes measures to control inflation.
The RBI recently left the benchmark repo rate, at which it lends to commercial banks, unchanged, at a steep 8.0 percent, citing a need to clamp down on rising prices.
Retail inflation slipped to 7.3 percent in June, and the RBI said earlier this year it was aiming for consumer-price inflation of 8.0 percent next January.
“We think at the current interest rate policy rate we are on course to meet those targets,” Rajan said after a meeting of the RBI’s central board in New Delhi.
“We will be discussing the monetary policy framework through the course of the year. Just now we have started a preliminary discussion (with the government),” he said.
Businesses have been clamouring for a cut, saying high rates discourage investment needed to help India’s economy get back on its feet.