New Delhi, July 05: The Reserve Bank of India governor, Bimal Jalan, said on Saturday he expected inflation to ease over a period of time and that the country's soft interest rates bias continued. "We will watch the situation about monsoons, and changes in inflation. We expect inflation to come down over a period of time," Jalan told reporters on the sidelines of a function to mark the Chartered Accountants' Day.
"It continued yesterday, it continues today," Jalan said when asked if the bias towards soft interest rates continued.
Inflation, as measured by wholesale prices, fell to 4.97 per cent on June 14, from a two-year high of 6.47 per cent on April 12. Analysts on Friday estimated that it would have declined to 4.89 per cent by June 21.

Jalan said the Reserve Bank of India (RBI) would sell bonds through open market operations (OMO) only if it was concerned with money supply, which was piling higher partly because of the central bank's dollar purchases. "We have always said if we are concerned about the liquidity situation in any point of time, we would do OMOs. It is a regular practice," Jalan said.
Jalan said the economic situation was good in view of the pick-up in the annual monsoons. Bureau Report