RBI To Keep Rates High To Combat Inflation – Deputy Governor

Indian interest rates will remain elevated as long as surging inflation imperils economic growth, a deputy governor of the country’s central bank said.

“If you are having continuously high inflation, it will kill your growth,” the Reserve Bank of India’s K.C. Chakrabarty told Bloomberg TV India yesterday. “If interest rates are high, that’s because inflation is high, and unless inflation is brought down, interest rates will not come down.”

Governor Raghuram Rajan is seeking to quell consumer inflation of more than 11 percent, the highest in the Group of 20 major economies, as bottlenecks in the supply of everything from food to energy stoke price increases. He surprised economists last month by holding the benchmark repurchase rate at 7.75 percent instead of adding to increases totaling 50 basis points since taking over the RBI in September.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu