RBI may take monetary action to rein in inflation

With inflation surging into double digits, the Reserve Bank of India on Tuesday said it may take monetary action to tame the rising prices ahead of the scheduled review of the policy on July 27.

"This (high inflation) is a concern, inflation is always a concern and will remain a concern. At some stage monetary policy has to address the issue," RBI Deputy Governor K C Chakrabarty told reporters on the sidelines a function organised by Financial Information Network and Operations Ltd, a firm working in the field of inclusive banking.

Wholesale price-based inflation provisionally touched a 19-month high of 10.16 per cent in May, while final figures released for the month of March put inflation at a much higher 11.04 per cent.

When asked whether monetary action can be taken before the next policy review, Chakrabarty said, "Absolutely".

Action by RBI require examination and after study if the Governor comes to a conclusion that if there is a need now, "it will be done," he said.

"It (monetary action) can happen any time," the Deputy Governor said. RBI will review its quarterly monetary policy on July 27.

The country's largest lender State Bank of India said on Monday that the liquidity position in the system was tight and interest rates can go up by 25 basis points in the coming months.