July 30, 2018

Time is ripe for second interest rate hike as inflation risks mount

India's central bank is on course to raise interest rates for a second consecutive policy meeting as it takes more decisive steps to rein in inflation and stem capital outflows.

With inflation running well above the central bank’s medium-term target of 4 per cent -- and the outlook set to worsen as oil prices stay elevated and the currency slides -- pressure is building on the Reserve Bank of India to act. Bond investors are already taking shelter in shorter-term debt amid concern this could be the start of a tightening cycle.

"It's a great time for the RBI to hike rates because people are worried about inflation and growth numbers are looking good,” said R Sivakumar, head of fixed income at Axis

Read more at https://www.business-standard.com/article/economy-policy/time-is-ripe-for-second-interest-rate-hike-as-inflation-risks-mount-118072900065_1.html

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