IMF: Reserve Bank of India will need to tighten monetary policy to counter inflation

In its latest annual report, the International Monetary Fund (IMF)  noted that the Reserve Bank of India (RBI) will need to gradually hike interest rates further in an effort to counter rising inflation.

Key Quotes:

“The average inflation is likely to rise to 5.2 percent in 2018/19 from a 17-year low of 3.6 percent in the previous fiscal year, the IMF said.

The RBI will need to gradually tighten policy further, in response to inflationary pressures, which will help to build monetary credibility.

It also forecast India’s economy could grow at 7.3 percent in the current fiscal year and 7.5 percent in 2019/20.”