By Suvashree Dey Choudhury
MUMBAI, Nov 15 (Reuters) - India's central bank chief, who
has raised policy interest rates twice since taking office in
September, said on Friday no single data point will determine
its next move on curtailing high inflation amid a weak economy.
Headline wholesale price index (WPI) inflation
hit an eight-month high of 7.0 percent in October, driven by
costlier fuel and manufactured goods, data on Thursday showed,
raising the prospect of a futher rate increase.
Reserve Bank of India (RBI) Governor Raghuram Rajan said
that demand needs to be reduced without having severe effects on
investment and supply.
"This is a balancing act, which requires the Reserve Bank to
act firmly so that the economy is disinflating, even while
allowing the weak economy more time than one would normally
allow for it to reach a comfortable level of inflation," he said
in a speech at a banking conference.
At its last meeting, on Oct. 29, the RBI raised its policy
repo rate by 25 basis points to 7.75 percent,
citing persistent inflationary pressures, despite an economy
that grew at a decade-low 5 percent in the fiscal year that
ended in March.
"The weak state of the economy, as well as the good Kharif
(summer) and Rabi (winter) harvest, will generate
disinflationary forces that will help, and we await data to see
how these forces are playing out," Rajan said.
"No single data point or number will determine our next
move," he said.
Indian markets were closed on Friday for a holiday.
(Reporting by Suvashree Dey Chowdhury; Writing by Subhadip
Sircar; Editing by Tony Munroe)