Subbarao says inflation, CAD still high

Says it is difficult to say how long the external problems affecting the rupee would persist

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Reserve Bank of India Governor Duvvuri Subbarao acknowledged on Thursday that inflation remains high, while also saying curbing inflation remained the central bank's most important task.

 

Subbarao added that RBI has been able to curtail inflation to some extent in the last two years.

The central bank will aim to keep inflation low, while supporting growth, he said.

Subbarao added that it was difficult to say how long the external problems affecting the rupee would persist.

Current account also deficit remains high, said Subbarao.

India's current account deficit hit a record 4.8% in the last fiscal year and has been a key parameter for the RBI while setting monetary policy.

The Reserve Bank of India will take into account developments in inflation, growth as well as the external situation while formulating its monetary policy review, due on July 30, he said.

 

The comments on inflation being high sent benchmark 10-year bond yield up 3 basis points to 7.50%.