Inflation to stand at 8.5% by March-end: RBI

The Reserve Bank of India (RBI) today said it would stick to its projection of inflation standing at 8.5 per cent by the end of the current fiscal, even as rate of price rise has already breached the central bank's target.

"Monitoring inflation is a continuous process. We still stand by that inflation will be at 8.5 per cent, as projected, by March 2010," RBI Governor D Subbarao told reporters while replying to a question on the rising inflation rates.

Subbarao's statement implies that inflation would now ease as it stood at 8.56 per cent in January.

He, however, said it was difficult to predict a precise roadmap now "but we expect that inflation would moderate by July 2010".

RBI has scaled up its target for inflation to 8.5 per cent from an earlier estimate of 6.5 per cent.

According to figures released today, food inflation rose marginally to nearly 18 per cent in the first week of February.

Yesterday, Food and Agriculture Minister Sharad Pawar had also said that food inflation would start moderating from April when rabi crops arrive in the market.

Finance Minister Pranab Mukherjee had also said inflation would ease in the next few months.

The RBI governor said the credit deposit ratio in Bihar was far below the national average and said the apex bank would do its best to improve it.