RBI Governer to meet Finance Minister
The Reserve Bank of India (RBI) Governor Duvvuri Subbarao will meet Finance Minister Pranab Mukherjee on Friday evening, sources said.
The meeting comes amid speculation that the RBI could tighten monetary policy to help stem rising prices.
Food prices surged an annual 20 percent in early December, raising prospects of food imports and reinforcing views the Reserve Bank is set to tighten policy to stop a breakout of inflation in the broader economy.
Food prices are jumping because of shortages after crops were hit by the weakest monsoon rains in 37 years and then flooding in parts of the country, but the price rises come as the economy is picking up strength after a dip in late 2008 and early 2009.
Food prices are increasingly becoming a worry for the RBI, which is now trying to balance between growth and inflation. The annual rate of inflation based on monthly wholesale price index (WPI) for the month of November was up 4.78%, according to data released recently. Food prices alone have risen by around 20% in the last one year.
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