With inflation moving closer to the double-digit mark, bankers expect the Reserve Bank of India (RBI) to increase its key policy rates by 25 basis points (bps) in the upcoming policy review on Friday.
The RBI faces a dilemma of sorts as the Indian economy is confronted with high inflation and sliding growth. It raised interest rates 11 times in last 18 months to tame inflation.
Inflation climbed to 13-month high of 9.78% in August suggesting that frequent interest hikes by RBI since March 2010 has proved ineffective to contain price rise.
The RBI faces a dilemma of sorts as the Indian economy is confronted with high inflation and sliding growth. It raised interest rates 11 times in last 18 months to tame inflation.
Inflation climbed to 13-month high of 9.78% in August suggesting that frequent interest hikes by RBI since March 2010 has proved ineffective to contain price rise.
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