Economics
RBI May Extend Rate Hikes on Worries Over Inflation-Target Breach
- RBI sees inflation breaching 6% ceiling for next few months
- 40 basis points hike doesn’t imply 75 bps increase in June
The Reserve Bank of India headquarters in Mumbai, India.
Photographer: Dhiraj Singh/BloombergThis article is for subscribers only.
India’s central bank may extend interest-rate hikes amid worries inflation would exceed its mandated target in the next six months, although a steep three-quarter point increase at the June monetary policy meeting isn’t implied by its recent move, people familiar with the matter said.
The Reserve Bank of India opted for an out-of-cycle hike on Wednesday because it didn’t want to shock markets with super-sized increases in the June and August meetings, even as it steps up efforts to prevent inflation from overshooting the mandated 2-6% target range, according to people, who didn’t want to be identified.