RBI may go for further monetary tightening measures: PMEAC

The Reserve Bank may take further monetary tightening measures to tame inflation which stood at 8.23 per cent in January, the Prime Minister’s Economic Advisory Council said today. “RBI will have to take a view looking at level of inflation. It is still at an uncomfortably high level. Some action, continued action, by the RBI (to tighten monetary policy) may be required,” PMEAC chairman C Rangarajan said. His remarks came even as inflation , though down marginally from December, continued to be above 8 per cent, a level where it has stood at since January 2010. The RBI has already hiked its short-term lending and borrowing rates by 25 basis points at its third quarterly review last month to tame inflationary pressure.  The apex bank has also termed inflation control as its topmost priority.  Asked about the fall in inflation numbers in January, Dr. Rangarajan said: “In some ways, it was expected. We can see inflation falling to 7 per cent by March.”  At last month’s review, the RBI had revised its inflation estimate to 7 per cent by March-end, from the earlier 5.5 per cent.  Inflation declined marginally to 8.23 per cent in January from 8.43 per cent in the previous month, as prices of certain commodities like wheat, pulses and sugar eased, although essential items like onions and other vegetables continued to remain firm. Besides, food items, many experts have also voiced concern over global crude prices which have crossed a 28-month high at $ 102 per barrel on account of political instability in the Middle-East, specially Egypt.