India cbank: need to calm nerves on inflation

MUMBAI, July 4 (Reuters) - Volatile prices of food and commodity prices have pushed inflation higher and the most urgent priority for central bankers was to calm nerves on inflation, India's central bank governor said in a speech.

"The most urgent and short-term priority for central bankers at the current juncture seems to be to calm the nerves about inflation or to anchor inflation expectations, with an implicit recognition that a somewhat elevated headline inflation in the short-term may be difficult to avoid," Yaga Venugopal Reddy said in a speech in Manchester on July 1.

The speech was released on Friday on the central bank's Web site: www.rbi.org.in (Reporting by Mumbai Treasury Team; Editing by John Mair)