RBI, finance ministry talk contingency plan for May 16

Reuters
Reserve Bank of India (RBI) Governor Raghuram Rajan reads the bi-monthly monetary policy statement at a news conference at the RBI headquarters in Mumbai April 1, 2014. REUTERS/Danish Siddiqui/Files

SHIMLA (Reuters) - The Reserve Bank of India (RBI) has discussed contingency plans with the finance ministry and the stock market regulator to deal with any excessive volatility from election results to be unveiled on Friday, Governor Raghuram Rajan said on Thursday. The RBI will also be ready to deal with any volatility in the rupee, Rajan said during a news briefing after the RBI's board meeting in Shimla. On inflation, Rajan said food prices were still a concern. Data on Monday had showed after consumer price inflation hitting a three-month high in April, although data on Thursday showed wholesale inflation unexpectedly easing. Still Rajan noted the RBI is comfortable that the current environment will allow it to meet a consumer inflation target of 8 percent by the end of the year. Rajan added inflation, along with growth, the fiscal deficit, and the current account deficit were the four big macro economic challenges the central bank and the new government would have to deal with. (Reporting by Manoj Kumar in SHIMLA; Writing by Swati Bhat; Editing by Anand Basu)