New Delhi: India’s headline inflation will ease following the tough measures taken by the Reserve Bank of India (RBI), the finance minister said on Wednesday.
Pranab Mukherjee also said he does not believe the central bank’s rate hike cycle is nearing its peak.
The RBI on Tuesday stunned investors by raising interest rates 50 basis points and indicated it would continue with its anti-inflationary stance despite slowing growth in Asia’s third-largest economy and uncertain global demand.
A Reuters snap poll after the move found six of 11 economists expect the repo rate, the central bank’s key lending rate, to go up to 8.50%, or 50 basis points higher than in a poll last week.
The repo rate is now at 8%.
Although the RBI has raised its main lending rate by 325 basis points since March 2010, headline inflation, at 9.44% in June, remains way above its comfort zone of 4-4.5%.
Govt may not pass land Bill in next session
Parliament may not pass a landmark land acquisition Bill in the session that begins on Monday, Pranab Mukherjee said, citing the legislative procedures involved in the process.
The Bill seeks to overhaul a colonial era law and offer farmers market or better rates for land taken over for industrial projects, and is expected to blunt protests that have hobbled several multi-billion dollar investments into India.