MUMBAI India's consumer inflation should ease in the next two months, and will fall to 8 percent by the end of the year, Reserve Bank of India (RBI) Governor Raghuram Rajan said in an interview with TV news channel CNN-IBN on Thursday.
The comments came after the RBI unexpectedly raised interest rates by a quarter percentage point on Tuesday, marking its third hike in five months.
The consumer price index eased to a three-month low of 9.87 percent in December. A central bank panel last week had recommended bringing down the retail inflation gauge to below 8 percent by January 2015.
"There is some disinflation in the system. What was 9.87 is going to come down further next month, and probably a little further into March," Rajan told CNN-IBN.
"We are setting rates at a level that we think is consistent with that disinflation for us to get some bite and for the inflation in the system to come down to about 8 percent at the end of the year."
(Reporting by Rafael Nam and Neha Dasgupta Editing by Jeremy Gaunt)
Trending On Reuters
British telecoms operator Vodafone has picked Bank of America Merrill Lynch (BofA), Kotak Investment Banking and UBS as joint global coordinators of its Indian unit's IPO, people familiar with the matter said, kicking off its long-awaited listing plan. Full Article