New India central banker vows to tame inflation
Saturday, September 6, 2008
INDIA'S new head of the Reserve Bank of India took office yesterday, pledging to wrestle down inflation riding at 13-year highs.
Duvvuri Subbarao (pictured), who was appointed for a three-year term to succeed Yaga Venugopal Reddy as governor, told reporters at the Bank's headquarters in Mumbai: "My immediate priority is to manage and anchor inflation."
Reddy, who is retiring, steered India's aggressive monetary tightening cycle, which began in late 2004.
Subbarao takes charge when India's annual inflation rate is at its highest levels since the current inflation series began being compiled 13 years ago.
On Thursday, India's inflation slowed for a second straight week to 12.34 per cent. But the figure was still far above the central bank's target of 7 per cent for the fiscal year to March 31, 2009.
Economists say they believe the central bank will tighten monetary policy at least one more time to get inflation under control before gradually starting to lower interest rates, most likely in 2009.
Analysts said they expected Subbarao to pursue the same hawkish policy against inflation as Reddy.
Subbarao once described inflation as "the king of tax on the poor" and has called hiking rates the "obvious" response to cutting inflation.
He is a former World Bank economist.AFP
Duvvuri Subbarao (pictured), who was appointed for a three-year term to succeed Yaga Venugopal Reddy as governor, told reporters at the Bank's headquarters in Mumbai: "My immediate priority is to manage and anchor inflation."
Reddy, who is retiring, steered India's aggressive monetary tightening cycle, which began in late 2004.
Subbarao takes charge when India's annual inflation rate is at its highest levels since the current inflation series began being compiled 13 years ago.
On Thursday, India's inflation slowed for a second straight week to 12.34 per cent. But the figure was still far above the central bank's target of 7 per cent for the fiscal year to March 31, 2009.
Economists say they believe the central bank will tighten monetary policy at least one more time to get inflation under control before gradually starting to lower interest rates, most likely in 2009.
Analysts said they expected Subbarao to pursue the same hawkish policy against inflation as Reddy.
Subbarao once described inflation as "the king of tax on the poor" and has called hiking rates the "obvious" response to cutting inflation.
He is a former World Bank economist.AFP
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