How do you expect policy measures to really tame inflation or manage the problem from hereon?
RBI is already taking cognizance of higher inflation numbers. Last year, they hiked CRR on March 31 or April 1. I wouldnt be surprised if we see no action in this Credit Policy. Liquidity will get sucked out through auctions and short-end T-Bill auctions. At the end of the day, the liquidity lying in the system is really government spending and all that needs to get sucked out. Any money that has been pumped in through interventions on dollar buying will probably go out through MSS. A CRR hike will push interest rates in the economy up. Given the fact that we probably could see some semblance of a slowdown, that is not necessarily what RBI wants. Q: Do you think it is only iron and steel prices that have led to this sort of uptick in the entire inflation figure this time around and do you see this inflation number to actually appreciate for the coming few weeks? A: I think inflation is a concern. It is not a local concern but a global concern. We are seeing soft commodity prices going
