New Delhi, March 22: The Planning Commission today said inflation will moderate in the next two months following the Reserve Bank of India’s (RBI) decision to hike key policy rates by 25 basis points each last week.
“RBI has to look at the price trend, underlying momentum…and what else is happening in the economy before making up its mind,” Planning Commission Deputy Chairman Montek Singh Ahluwaia said, commenting on the decision of the central bank to check rising prices by raising rates.
Besides monetary action, the declining trend in food prices in the backdrop of a good rabi (winter) crop, he said, “Will bring down overall inflation in the next two months.”
The RBI’s decision to raise repo and reverse repo (short-term lending and borrowing) rates by 25 basis points each to 5 per cent and 3.
–Agencies