Reserve Bank of India Governor YV Reddy said On Wednesday that the bank was sticking to its inflation forecast of 4 to 4.5 per cent for 2003-04.

Speaking to reporters after a meeting with Finance Minister Jaswant Singh, Reddy said the RBI was keeping an eye on the rising global oil prices but the economy had enough resilience at the moment to absorb the impact of the recent rise.

The latest official weekly wholesale price index was 5.38 per cent for the week ending December 6. The WPI has risen for the past four weeks based on the rise in the prices of primary articles and fuel.

The government has factored in a period of moderate inflation to help in the revival of the economy in 2003-04.

The Mid-Year Review of the economy, prepared by the finance ministry, has said that good rains this year have dampened inflationary prospects for agricultural goods.