We'll continue doing what we are doing regardless of US Fed decision: RBI Governor

Rajan said consumer inflation eased to a record low of 3.66% in August due to a favourable base effect or else it would have been in mid-5% range

The Reserve Bank of India (RBI) will continue to focus on its own path regardless of the US Fed's decision, said governor Raghuram Rajan on Friday.

“The market seem to have reacted quite benignly certainly towards us. What we will have to do is continue doing what we are doing which was anyways the intention regardless of the Fed decision,” said Rajan at the Fourth C K Prahalad Memorial Lecture in Mumbai.

The US Fed kept interest rates unchanged on Thursday but kept open the possibility of a modest policy tightening later this year.

Rajan reiterated that keeping inflation low is the key task for sustainable economic growth of the country. RBI is scheduled to hold its next monetary policy review meeting on September 29. Rajan added that the Consumer Price Index (CPI) based retail inflation at 3.6% in August was largely due to base effect excluding which it would be around 5.5%.

"The differential between WPI (Wholesale Price Index) and CPI is a source of problems. We have to be careful while pursuing growth and have to make it sustainable. The key is to keep inflation low not just today, but also in the future," Rajan said.