With inflation still looming large, Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty today hinted the central bank was open to another increase in key policy rates. During the previous policy review, Governor D Subbarao had indicated the chances of another rate increase were relatively low as inflation was moderate. “The governor said it might not be necessary. That does not mean if there is a pause you cannot do it (raise rates). If it needs to be done, it can be done; that is his choice,” Chakrabarty said when asked if RBI was open to raising rates despite the pause indication in the November policy. An accommodative monetary policy was not required at present due to the high growth rate, Chakrabarty said, on the sidelines of a Confederation of Indian Industry event at Kolkata today.
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