MUMBAI (Reuters) - Reserve Bank of India (RBI) governor Raghuram Rajan called inflation a “destructive disease” that was forcing the bank to keep interest rates high, according to a domestic news agency Press Trust of India report carried by The Economic Times newspaper’s website.
The strong warning against inflation came ahead of the central bank’s policy review next Tuesday. The RBI raised interest rates by 25 basis points each in September and in October. It kept policy on hold last month.
“Inflation is a destructive disease,” Rajan was quoted by PTI as saying in a New Delhi speech on Thursday.
“Industrialists complain about high interest rates but we don’t have a choice but to keep interest at a high rate because inflation is high at 8 per cent.”
Reporting by Rafael Nam; Editing by Gareth Jones