Reserve Bank of India (RBI) governor Duvvuri Subbarao on Monday signalled another round of rate hike in the next policy review by saying that India is facing surging inflation and monetary policy needs to be calibrated to manage inflation and support growth.
"We recovered from the crisis sooner than other countries but inflation also caught up sooner. For the Reserve Bank the challenge is to calibrate monetary policy taking into account the demands of inflation management and the demand of supportive recovery."
The RBI is expected to hike key policy rates by at least 0.25 percentage points in its third quarter review of the monetary policy on January 25.
Headline inflation rose to 8.43% in December last year.