Millennium Post

Inflation may hold RBI from cutting rates: Parekh

The Reserve Bank may find it difficult to cut interest rate in its second quarter monetary policy review later this month in view of high inflation, HDFC chairman Deepak Parekh said on Wednesday.

‘Inflation numbers have marginally tweaked up. It is very difficult for RBI to cut interest rates. I don’t think this time interest rates will come down because [inflation] numbers don’t justify reduction,’ he said.

Parekh was talking to reporters after a meeting with finance minister P Chidambaram.

The RBI will come out with its policy review on 30 October. With WPI inflation rising to a 10-month high of 7.81 per cent in September, the scope for reduction of policy rates diminishes.

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