News Column

India

January 24, 2014

THE RESERVE Bank of India (RBI) must retain the objective of supporting economic growth even as it battled price rises, Finance Minister Palaniappan Chidambaram said yesterday, signalling challenges in implementing a proposed shift to target inflation. "Inflation targeting is only one among the objectives," Chidambaram said in an interview in Davos . "Another objective of the RBI must be to support growth." An Indian central bank committee has recommended setting a 4 percent target for consumer price inflation by 2016 as part of the most sweeping changes in the organisation's 78-year history. That target was "ambitious" and the government would have a say in any final decision, said Chidambaram, who called it a "laudable objective" to work toward inflation targeting. Prime Minister Manmohan Singh has seen policies to boost rural wages and distribute cheap food contribute to consumer price inflation of more than 9 percent for about two years. The slowest economic expansion in a decade has sapped support for his ruling Congress Party , which is trailing in opinion polls ahead of federal elections due by May. Chidambaram said the government would continue curbing gold imports into the next fiscal year. The rupee, which has fallen about 13 percent in the past year, pared losses after Chidambaram's comments on gold imports. It fell 0.2 percent to 61.95 rupees per dollar at 4.39 pm in Mumbai yesterday. The Standard & Poor's BSE Sensex gained 0.2 percent. - Bloomberg The Mercury


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Source: Mercury, The (South Africa)


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