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India Inflation Fight, Monsoon May Take Pressure Off RBI, Former Deputy Governor Says

  • Repo rate can rise 50 bps in June, and another 25 bps by March
  • Government-RBI steps may cool inflation within target of 6%
Market stalls at Nehru Place IT Market in New Delhi. 

Market stalls at Nehru Place IT Market in New Delhi. 

Photographer: Anindito Mukherjee/Bloomberg

India’s coordinated fiscal and monetary efforts to tame inflation, plus a good agricultural production outlook, may take pressure off the central bank to aggressively raise interest rates later in the year, according to a former Reserve Bank of India official.

Interest rate increases by the RBI “should be very moderate” after an expected 50 basis point rise at its next meeting in June, Rama Subramaniam Gandhi, who was a deputy governor from 2014 to 2017, said in a Bloomberg Television interview on Monday.