The RBI should start worrying about inflation

After staying in the negative zone for quite a while, inflation has rebounded and how! The wholesale price index for the week-ended September 19 stands at 0.83%. The headline number for week-ended August 1 stood at -1.74%—a 257 basis point (2.57%) rise in seven weeks does not bode well for the country.

In an interview to CNBC-TV18, HDFC Bank’s Chief Economist Abheek Baruah said it was time for the Reserve Bank of India (RBI) to start worrying about inflation. Baruah expects inflation to reach 5.6% by December and 7.7% by March.

Baruah said the RBI could make some kind of measure to rein in excess liquidity, “since India was coming out of the low growth phase.”