Subbarao says inflation still remains high

India's inflation rate is still high, the Reserve Bank of India (RBI) governor D Subbarao said on Friday, suggesting that the bank is unlikely to loosen monetary conditions anytime soon to support faltering growth, despite a slight easing in prices last month.

Subbarao's comments come after data on Wednesday showed India's headline inflation rose 7.45 per cent in October, unexpectedly dropping to its slowest pace in eight months. Subbarao has previously said he expects price pressures to ease only in the first part of 2013, and has strongly indicated any cut in interest rates would likely come in January at the earliest.

"We're always on high alert, high alert about growth, about inflation certainly," Subbarao told reporters on the sidelines of a conference.

Subbarao also said the central bank is prepared to issue new bank licences, but only if all the appropriate conditions are put in place.

The RBI has faced pressure from the government to start laying the groundwork towards issuing new banking licenses, but the central bank has stated it prefers to wait until the Banking Regulation Act is amended.

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