RBI ready to deal with any excessive volatility from election results

Reserve Bank of India (RBI) Governor Raghuram Rajan on Thursday said that the central bank is prepared to deal with any excessive volatility following election results to be unveiled tomorrow.

Addressing a press conference, after the board meeting in Shimla where he discussed contingency plans with the finance ministry and the stock market regulator, Rajan said that the RBI will also be ready to deal with any volatility in the rupee, during a news briefing.

"We are prepared to deal with excessive volatility in rupee and we will do whatever we can to try and reduce volatility; and of course volatility is driven by other things than RBI actions. It is driven by investor interest, it is driven by investor sentiment, it is driven by macro economic performance, all these things will come into play," Rajan said.

On the issue of inflation, Rajan said food prices were still a concern.

"We will do whatever we can on the inflationary front and at this point as I said we feel comfortable that we have a path, a plan. That plan is what the Urjit Patel committee said brings inflation down to 8 percent by the end of the year," Ranjan added.

He also said that inflation, growth, fiscal deficit, and the current account deficit were the four big macroeconomic challenges the central bank and the new government would have to work on.