Subbarao hints at slower pace of hikes

The central bank has hinted that it may ease the pace of raising key rates with the moderation in food prices and keeping in mind the need to strike a balance between taming inflation and ensuring that the growth momentum is not choked off.

The Reserve Bank of India governor D Subbarao said on Friday that inflationary pressures were easing because of an improved supply position besides the impact of interest rate tightening by the central bank. There is evidence that growth is getting more broad-based. Going forward, the Reserve Bank will calibrate policy action to the evolving growth-inflation dynamics.

The RBI has raised key rates four times this year mainly to cool prices in an economy projected to grow at well over 8.5% this financial year. The central bank chief said in terms of growth and inflation, India is quite distinct not just from the rest of the world but also from other emerging markets.