The Finance Minister, Mr Pranab Mukherjee, has said that inflation weighed on the mind of the Reserve Bank, which kept the key interest rates unchanged in its monetary policy review.
He said that it was not necessary for the RBI Governor to consult him before the mid-quarterly review of the credit policy.
High inflation numbers “might have weighed their (RBI’s) decision-making process. And normally in the mid-quarterly review, it is not necessary for the Governor to consult the Minister,” Mr Mukherjee told reporters here today.
In the mid-quarterly policy review, the RBI kept the policy rates unchanged in view of rising inflation and global economic uncertainty, pulling down the stock markets sharply.
Besides, the central bank has also kept the cash reserve ratio (CRR) or the percentage of deposits that banks have to keep with the RBI unchanged at 4.75 per cent.
The Wholesale Price Index-based inflation had risen to 7.55 per cent in May from 7.23 per cent in April. Besides, retail inflation also moved up to 10.36 per cent in May from 10.32 per cent in the previous month.
The RBI said the future action would depend upon on external factors, domestic developments and inflationary risks.
“Future actions will depend on a continuing assessment of external and domestic developments that contribute to lowering inflation risks,” it said.