INTERVIEW-India rate rise cycle near peak-c.bank deputy gov

LONDON, Sept 19 (Reuters) - India faces inflation of close to 10 percent in the September-November period but price pressure should moderate from December, meaning the peak of an 18-month rate rise cycle is near, a deputy governor of the Reserve Bank of India (RBI) said on Monday.

India raised interest rates last week for the 12th time in 18 months and signalled more was to come. Rates now stand at 8.25 percent and a Reuters poll of analysts shows one more hike is expected this year.

"The main motivation for the hike was that we are expecting headline inflation to remain above 9 percent and close to 10 pct for the next three months -- September-October-November," Subir Gokarn told Reuters in an interview.

"It would be fair to say we are near the peak. Whether we are at the peak or not is not a judgement I can make."

He added: "We anticipate the inflation trajectory will turn down in December for two reasons -- the base effect and the cumulative effect of rate hikes on demand....That's an indication the peak is in sight."

"To say this is a sort of aggressive anti-inflationary stance in perpetuity is clearly not right, there are clearly indications that we do expect to see a turnaround."

Indian inflation rose to 9.78 percent in August, the highest in a year and among the highest in the developing world. The RBI has stressed its commitment to curbing inflation.

India's growth is cooling rapidly, meanwhile, with growth in the three months to June, at 7.7 percent, the lowest in six quarters and well below the 8.5 percent of the previous fiscal year that ended in March. Industrial output growth slumped to 3.3 percent in July, its weakest annual pace in nearly two years.

"We do see signs of growth moderating but they are not dramatic," Gokarn said. "The IP number of course was a strong negative signal but looking at tax, credit growth and the analysis of corporate performance, none of these suggest a very dramatic slowdown."

He said a soft landing was already under way and the RBI was trying to manage monetary policy in a way that would not allow economic growth to dip too far below 8 percent. (Reporting by Sujata Rao; Editing by John Stonestreet)