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RBI’s Dove Urges Slow Hikes as Rates Not Far From Neutral

  • Ashima Goyal says sharp hikes can achieve little on inflation
  • Chances of stagflation is zero as growth continues: Goyal
The Reserve Bank of India (RBI) headquarters in Mumbai.

The Reserve Bank of India (RBI) headquarters in Mumbai.

Photographer: Dhiraj Singh/Bloomberg
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An Indian monetary policy dove signaled it’s probably time to abandon the aggressive pace of increases in borrowing costs, saying the inflation-adjusted real interest-rate is approaching neutral terrain -- a level where it can help check inflation without stifling economic growth.

Sticking to larger hikes instead carries the risk of crimping an already weak demand without materially softening inflation, Ashima Goyal, one of the six members of the Monetary Policy Committee, warned in an email interview, adding that she isn’t speaking on behalf of the full MPC.