Not surprised if RBI increases rates by 25%: Rangarajan

With a spike in food inflation, C Rangarajan, Chairman of Economic Council to the Prime Minister, today said he would not be surprised if RBI hikes the rate by 25 basis points to contain it. Replying to a question about whether he expected another hike in the rates due to the increase in food inflation, Rangarajan said, "I will not be surprised if the RBI raises the rate by 25 basis points".   Driven by high prices of fruits, milk, meat, eggs, India's food inflation crossed 17% for the week-ended January 22. Rangarjan, who was speaking on the sidelines of a book release function organised by Southern India Mills Association, said RBI would continue to act as long as there was a need to contain the rapid escalation in food prices.