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Indian plan to fight inflation

September 06, 2008

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MUMBAI, Sept 5: India’s new head of the Reserve Bank of India took office on Friday, pledging to wrestle down inflation riding at 13-year highs.

Duvvuri Subbarao, who was appointed for a three-year term to succeed Yaga Venugopal Reddy as governor, told reporters at the Bank’s headquarters in Mumbai: “My immediate priority is to manage and anchor inflation.”

Subbarao takes charge when India’s annual inflation rate is at its highest levels since the current inflation series began being compiled 13 years ago.

Analysts said they expected Subbarao to pursue the same hawkish policy against inflation as Reddy.

Subbarao once described inflation as “the king of tax on the poor” and has called hiking rates the “obvious” response to cutting inflation.—Agencies