India cenbank chief says premature to talk about rate hikes

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India's central bank chief Sanjay Malhotra said it is premature to talk about interest rate hikes at this stage of the policy cycle. Speaking to ET NOW, Malhotra said the Reserve Bank of India is watching for second-round effects of higher oil prices on inflation before taking a call on rates, adding that there are no signs of inflation generalizing yet. The monetary policy committee kept rates unchanged earlier this month with a neutral stance, and Malhotra noted that if the central bank wanted to prepare markets for hikes, it would have shifted the stance to restrictive. He also said the initial response to steps supporting the rupee has been good and that the RBI expects healthy flows.

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