Mumbai: An inter-meeting policy rate hike will depend on volatility and wholesale price-based inflation is not beyond RBI’s estimates, a deputy governor of the Reserve Bank of India (RBI) said on Thursday.
K C Chakrabarty did not say what he meant by volatility, but his statement came in response to a question on accelerating inflation in recent months and data pointing to a strong growth momentum.
“If the volatility is more, if things change fast; yes, there will be more measures, it depends on how the environment is,” he told reporters on the sidelines of a conference when asked about double-digit inflation.
India’s headline inflation unexpectedly accelerated in May, heightening expectations the RBI would raise rates before its scheduled July review despite concerns over Europe’s debt crisis.
The benchmark 10-year bond yield briefly rose 1 basis point after the comments to 7.56%. It had closed at 7.59% on Wednesday.