Supply crunch spiking inflation, no quick remedyL: RBI official

Says controlling prices a continuous effort, can’t be done in a day.

Inflationary pressures were likely to persist on supply-side constraints, a top Reserve Bank of India (RBI) official said today, adding there were no short-term solutions to the problem.

“Anything like inflation can be controlled on an improvement in supplies. This is a continuous effort and you can not do it in a single day,” the official said.

“Price pressures will sustain and nobody can do anything about it in the short-term,” the RBI official said.

The central bank is slated to detail its quarterly review of annual monetary policy on January 25.

According to the latest weekly data, food inflation shot to a 10-week high of 14.44 per cent in the week to December 18, as against 12.13 per cent the week before.

High food prices have kept headline inflation at an elevated level.

The wholesale price index based number was 7.48 per cent in November, compared to 8.58 per cent previous month. The month-on-month decline was primarily due to the statistical impact of a high base.

Contrary to expectations, food prices have remained stubbornly high despite good rains. Among other items, the country is currently facing an acute shortage of onions, with the humble vegetable selling at Rs 60-70 a kg at the retail level.

Earlier today, prime minister’s economic advisory council chairman C Rangarajan said headline inflation of over four per cent was “uncomfortable” and RBI might take monetary action this month if it remained firm.

About the fraud involving a Citibank employee, the official said RBI was investigating the issue. In the garb of wealth management, a Citibank employee allegedly duped high net worth clients of about Rs 300 crore.

The clients were promised unusually high returns from investment products sold by Citibank employees.