India Urged to Increase Rates Soon

India is being urged to hike interest rates following an unexpected rise in inflation, reports Bloomberg, citing Chakravarthy Rangarajan, chairman of the Prime Minister’s Economic Advisory Council.

 

“The markets should expect, given the inflationary situation in the economy, some rises in the policy rates,” Rangarajan told Bloomberg.

 

Since mid-March, central bank governor Duvvuri Subbarao increased rates a couple of times. But last month, because of a cash crunch with lenders, Subbarao eased rules until July 2 to improve liquidity, says Bloomberg.

 

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