Duvvuri Subbarao, who took over from Y V Reddy last Friday, told his first full press conference that the bank would monitor the price situation closely and take appropriate action but would be mindful of the implications of its stance on growth. Traders judged his comments less hawkish than his predecessor, who tightened monetary policy conditions sharply in June and July.On inflation

•It is too early I believe to take a call on inflation, however, I do have some sense of satisfaction in moderation of the WPI numbers. If you look at the month-on-month figures, you will see that the momentum of inflation is coming down. We have seen in the last few weeks, it coming down.

• So my short answer is we are seeing some moderation, although I am not sure that we can see a discernible trend."

On interest rates

• I have been asked whether monetary policy will be tightened further. There are, as they say, several known unknowns. First, we will have to watch the impact of the measures already taken.

• Second, we will be watching the drivers of demand – in particular which sectors are triggering the growth in demand.

•Third, in a globalised world, we will also have to be watching developments around the world and make an assessment of their potential impact on our economic management.

On economic growth

The engines of growth are still on track. The recent moderation is only a cyclical down-turn. The structural India growth story is still intact and credible.

... contd.