Good monsoon, RBI's policy to further ease inflation: Pranab

Encouraged by the marginal decline in rate of price rise to 9.22% in July, Finance Minister Pranab Mukherjee today said inflation pressure would ease further on back of good monsoon.

"I am quite confident that good monsoon will ensure moderation of inflationary pressure," he told reporters pointing out that the government and the Reserve Bank are working in tandem to contain prices.

"Inflationary pressure is in the system and we shall have to make effort to have the inflationary pressure at an acceptable moderate level for which we are working in tandem with the Reserve Bank," Mukherjee told reporters here.

His comments came after release of data which reported headline inflation for July at 9.22%, down from 9.44% in June.

"The measures taken to remove supply constraints in some of the agricultural products and the monetary policy adopted by the RBI will help bring about moderation of inflationary pressure and at the same time it will ensure the average ratio of liquidity of the legitimate credit requirement of the industry and other sectors...," Mukherjee said.

He pointed to the decline in inflation of both food and non-food primary articles in July and termed its as "good news".

Commenting on the July numbers, Planning Commission Deputy Chairman Montek Singh Ahluwalia said inflation still continues to remain high.

"There is slight decline in inflation. It is still on high side. We have to be vigilant. Its good that it is gradually declining," Ahluwalia said.