Decided to hold rates even before inflation data: Rajan

Dont judge me by whether I raise interest rates in every meeting.

Reserve Bank of India chief Raghuram Rajan on Monday said that the central bank had decided to keep rates on hold even before the high consumer price and retail inflation data for November were released.

In interviews to TV channels,he,however,brushed aside suggestions that the RBI has shifted focus from inflation management to growth.

8230;nobody should doubt our desire to fight inflation and our belief that interest rates are our main tool that we have. Nobody should doubt that, Rajan said when asked if the central bank is now more keen to boost growth than to tame inflation.

He said the RBI will wait for the next set of data on inflation and industrial growth before taking a call on interest rates.

We want to see data on how the work we have done so far is playing out and then we will take the next step. Dont judge me by whether I raise interest rates in every meeting, he said.

Rajan had increased the key interest rate twice by 0.25 per cent each in successive monetary polices,but refrained from hiking it further at its December 18 mid-quarter monetary policy review despite high inflation. The repo rate is currently 7.75 per cent.

Retail inflation climbed to a nine-month high of 11.24 per cent in November,while wholesale price inflation rose to a 14-month high of 7.52 per cent last month. The next policy review is scheduled on January 28.

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Rajan said: Inflation targeting does not mean that you dont keep an eye on growth because the level of growth in the economy tells you how much disinflation there is already in the system.

He said while the RBI is targeting wholesale inflation at 5 per cent,it has yet to identify an appropriate level for inflation as measured by the consumer price index.

The government will release the next set of data on inflation and industrial growth in January.

Re hits 1-week high on RBI chiefs comments

MUMBAI: The rupee strengthened on Monday to its highest level in nearly a week,boosted by the Reserve Bank of India Governor Raghuram Rajans comment on reluctance to overtighten monetary policy after leaving interest rates unchanged in a surprise move last week. Rajan said the central bank had tilted towards keeping rates on hold even before November consumer and wholesale price inflation data were released.

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In an interview to television channel ET Now,he said when growth is weak,we have to be careful of over-tightening. I expect some support for the dollar/rupee around 61.65 levels with the pair broadly holding in a 61.60 to 62.40 range until the year-end. The rupee closed at 61.95 per dollar compared with 62.04 on Friday. Reuters

Gold smuggling will rise if import curbs continue

Mumbai: Gold smuggling into India will pick up if the import curbs continue for too long,the Reserve Bank of India Governor Raghuram Rajan said in an interview to television channel CNBC Awaaz on Monday.

India will keep a tight leash on gold imports despite a recent improvement in its trade deficit and lobbying by a bullion industry struggling with high premiums and a supply crunch.

Earlier this year,the Indian government and the central bank issued a series of curbs on imports of gold the second-most expensive item on Indias import bill hoping to ease the pressure on the currency. Measures included hiking import duties on gold to a record 10 per cent. Reuters