Low inflation a must for growth
KATHMANDU:
Reserve Bank of India (RBI) governor Dr D Subbarao said low inflation is necessary to sustain growth and a certain level of regulation is needed to rescue the Indian economy from the current global financial turmoil.
Delivering a lecture, ‘Global Financial Crisis and Lessons Learnt by India’, at Nepal Rastra Bank here yesterday, he underlined the need to bring down inflation and inflationary expectations to sustain growth. The visiting governor of the RBI also said deregulation alone is not sufficient to maintain a sound economy and a certain level of regulation is necessary for rescuing the economy from the current financial crisis.
Subbarao’’s comments come against the backdrop of the Indian central bank’’s fight against inflation, which was 9.44 per cent in June. Besides, food inflation for the week ended July 30 shot up to 9.9 per cent sparking investor fears of another round of monetary tightening, which will further push up interest rates impacting growth. The RBI has hiked its lending and borrowing rates 11 times since March last year in a bid to curb consumer spending to tame the rate of price rise. However, high interest rates have increased borrowing costs for the industry crimping corporate margins and fanning fears of a slowdown.
IC notes usages
Governor of RBI Dr D Subbarao said that there is a possibility of IRs 500 and IRs 1000 denomination notes usages in Nepal that has been banned since long. “But it should be agreeded by governments of Nepal and India,” he said.
Source: THT
Reserve Bank of India (RBI) governor Dr D Subbarao said low inflation is necessary to sustain growth and a certain level of regulation is needed to rescue the Indian economy from the current global financial turmoil.
Delivering a lecture, ‘Global Financial Crisis and Lessons Learnt by India’, at Nepal Rastra Bank here yesterday, he underlined the need to bring down inflation and inflationary expectations to sustain growth. The visiting governor of the RBI also said deregulation alone is not sufficient to maintain a sound economy and a certain level of regulation is necessary for rescuing the economy from the current financial crisis.
Subbarao’’s comments come against the backdrop of the Indian central bank’’s fight against inflation, which was 9.44 per cent in June. Besides, food inflation for the week ended July 30 shot up to 9.9 per cent sparking investor fears of another round of monetary tightening, which will further push up interest rates impacting growth. The RBI has hiked its lending and borrowing rates 11 times since March last year in a bid to curb consumer spending to tame the rate of price rise. However, high interest rates have increased borrowing costs for the industry crimping corporate margins and fanning fears of a slowdown.
IC notes usages
Governor of RBI Dr D Subbarao said that there is a possibility of IRs 500 and IRs 1000 denomination notes usages in Nepal that has been banned since long. “But it should be agreeded by governments of Nepal and India,” he said.
Source: THT
