June 17, 2010 8:34 PM

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High inflation cause of worry for central bank, says RBI Dy Governor

The RBI said that high inflation is a cause of worry for the central bank and it is willing to take policy actions as per the changing economic environment. Speaking to reporters in Mumbai, RBI Deputy Governor K C Chakrabarty said that if things change fast, there will be more measures depending upon the environment. Referring to RBI's move to buy back government securities, he said that the measure was aimed at easing the liquidity conditions in the system. The wholesale price-based inflation shot passed 10 per cent in May putting pressure on the central bank to hike the policy rates. RBI, on Wednesday, said that the government will prematurely buy back three types of bonds worth up to 20,000 crore rupees from Friday. The move has been taken as liquidity has come under pressure due to much higher 3G and broadband spectrum licence fees, and the first quarter advance tax.

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