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India Central Bank governor warns against complacency in fighting inflation
February 5, 2015, 4:21 am

Earlier this week, Rajan left interest rates unchanged after an unscheduled cut last month [Xinhua]

Earlier this week, Rajan left interest rates unchanged after an unscheduled cut last month [Xinhua]

Ahead of Prime Minister Narendra Modi’s first full-year budget, India’s Central Bank governor Raghuram Rajan warned on Thursday that India still has some way to go in fighting inflation.

“People say we have won the war on inflation. I am not so confident. What we need to aim for is that if there are supply shocks in future, they don’t increase inflationary expectations. We should be able to see through those shocks. That is when I would say we have won,” Rajan said in an interview with The Economic Times published on Thursday.

Earlier this week, Rajan left interest rates unchanged after an unscheduled cut last month.

Rajan kept the benchmark repurchase rate at 7.75 per cent.

The Central Bank Governor has repeatedly stressed that he needs to see further data confirming “high-quality fiscal consolidation” before easing further.

The government will present its annual budget at the end of this month.

The Indian government announced revisions to gross domestic product data on Jan. 30, showing an expansion of 6.9 per cent in the year through March 2014, up from the 4.7 per cent previously reported.

 

TBP and Agencies