India cbank, finmin have discussed contingency plan for Friday

SHIMLA (India) Thu May 15, 2014 7:21am EDT

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SHIMLA (India) May 15 (Reuters) - The Reserve Bank of India 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 central bank's board meeting in the northern city of 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)

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