Date:29/04/2008 URL: http://www.thehindubusinessline.com/2008/04/29/stories/2008042951450600.htm

Back RBI says fiscal steps will help contain inflation

Our Bureau

Mumbai, April 28

The fiscal and supply-augmenting measures taken by the Government are expected to help contain inflation and inflationary expectations, according to the RBI.

In the macro-economic and monetary developments 2007-08 report, released on the eve of Annual Monetary Policy, the RBI said reduction in import duty on edible oil, duty-free import of cement and other such steps would help contain inflationary expectations.

As an anti-inflationary measure, the RBI had also hiked the cash reserve ratio by 0.5 percentage points on April 17.

However, the RBI said inflation risk on account of oil prices remain incipient, as the rise in price has not been fully passed on. Probably taking a cue from the RBI report, bond prices moved up, on Monday.