MUMBAI, Aug 19 (Reuters) - India's rate panel left the door open to future rate hikes earlier this month, watching for evidence that supply-sparked inflation may be seeping into the broader economy which could merit higher borrowing costs, minutes of the committee's meeting released on Wednesday showed.
A sharp rise in oil prices brought on by the Iran war has stoked inflation worries, prompting markets to wager on rate hikes, while also exerting pressure on the Indian rupee.
The panel had voted unanimously to keep the policy repo rate (INREPO=ECI) unchanged at 5.25% on August 5, while retaining its monetary policy stance at "neutral".
India's headline consumer inflation remained well within the central bank's 2-6% tolerance band at 4.45% in July. The Reserve Bank of India has a 4% medium term target.
While there are limited signs of inflation becoming generalized so far, headline inflation does appear to be normalizing "from its benign levels seen hitherto," RBI Chief Sanjay Malhotra said in the minutes.
#inflation
A sharp rise in oil prices brought on by the Iran war has stoked inflation worries, prompting markets to wager on rate hikes, while also exerting pressure on the Indian rupee.
The panel had voted unanimously to keep the policy repo rate (INREPO=ECI) unchanged at 5.25% on August 5, while retaining its monetary policy stance at "neutral".
India's headline consumer inflation remained well within the central bank's 2-6% tolerance band at 4.45% in July. The Reserve Bank of India has a 4% medium term target.
While there are limited signs of inflation becoming generalized so far, headline inflation does appear to be normalizing "from its benign levels seen hitherto," RBI Chief Sanjay Malhotra said in the minutes.
#inflation
5 days ago
