Geopolitical Shadow Looms Large

Demand pressure, higher inflation may force policy review

The Reserve Bank of India (RBI) has expressed concern over the rising inflation, even as it has pegged it lower in the range of 5-5.5 per cent for the fiscal 2003-04. The ruling inflation rate is 6.47 per cent.

The central bank also pointed out that considerable uncertainties continued to remain on the inflation front due to the current geopolitical uncertainties.

While the RBI proposes to continue with the policy of maintaining adequate liquidity in the system and a soft interest rate environment, the governor said: