The Reserve Bank of India (RBI) governor Y V Reddy today hinted at higher than projected growth rate and lower than projected inflation rate for fiscal year 2004-05. | |
| Reddy was talking to the press on the sidelines of the sixth annual conference of Fixed Income Money Market and Derivatives Association of India (Fimmda) and Primary Dealers' Association of India. |
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| "We expect the growth to be better than what RBI had anticipated in November last year," Reddy said. In its November policy, the RBI had projected 6-6.5 per cent GDP growth and 6.5 per cent wholesale price index based inflation rate for the year. |
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| The governor also indicated that a clearer picture will emerge in the assessment of the current year and the outlook for 2005-06 in monetary policy statement slated to be released next month. |
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| Commenting on the impact of rising oil prices on inflation, Reddy said that the RBI's policy response to inflation does not change weekly and it is a relatively longer-term assessment. |
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| Refusing to speak on the diversification of foreign exchange reserves in the wake of the current shift in the stance of Asian central banks, he said "We are in discussion with all central banks. The debate is a continuous process. And one cannot expect central bank governor to say anything further on this issue." |
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| On Thursday the Japanese Prime Minister Junichiro Koizumi said foreign exchange reserves should be diversified. Japan is the world's largest holder of foreign exchange reserves. Currently, India's foreign exchange reserves are over $135 billion. |
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| On being asked on the fund-raising capacity of the special purpose vehicle mooted for infrastructure financing, Reddy said it is the right time for the government to issue long-term bonds. |
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