News: RBI to contain inflation within 5% to 5.5%

(PTI 21/12/2006) Kolkata - The Reserve Bank of India (RBI) today said that it would take policy measures required to keep inflation between five per cent and 5.5 per cent till the end of the year.

Deputy Governor of RBI Rakesh Mohan told reporters that as mentioned in the Mid-term Policy Review, inflation would be contained within that range and the bank would take certain policy measures required to do so.

"Inflationary expectations would be contained," Mohan said after a meeting of the Central Board of RBI held here and attended by Governor Y V Reddy and others.

Speaking about liquidity, Mohan said that there was temporary excessive tightness in the market at the moment.

Following a hike in the cash reserve ratio (CRR) by 50 basis points recently, a certain amount of liquidity was expected to be sucked out of the system, he said.

Mohan said that total liquidity in the system ranged between Rs 80,000 crore to Rs one lakh crore in the last one year or so.