Monetary action can happen any time: RBI Deputy Governor

With headline inflation surging to a 19-month high of 10.16% in May, RBI Deputy Governor K C Chakrabarty today said that the RBI may take monetary action to control the inflationary pressures ahead of the scheduled policy review on 27^th July 2010.

He said that the high inflation was a concern, and that inflation would always be a concern, reiterating that monetary policy has to address this issue.

"It (monetary action) can happen any time," the Deputy Governor said.

The country's largest lender State Bank of India had said yesterday that the liquidity position in the system was tight and interest rates could go up by 25 basis points in the coming months.

Finance Minister, Pranab Mukherjee also stated earlier today that the RBI would take appropriate action to control inflation as and when needed.

Planning Commission member Saumitra Chaudhuri said that inflation would stay "high" for the next two months but could be expected to ease post-September.