The Reserve Bank of India (RBI) is conscious of the need to bring down interest rates to help the economy grow, said RBI governor D Subbarao at an industry event.
Earlier in the day, deputy governor Subir Gokarn had said that the RBI will change its monetary policy stance only if inflation eases and further rate increases will depend on the price rise situation.
“It (further rate hike) depends on the inflation situation,” said Gokarn. “We raise rates not because it is an end in itself.To the extent we see the problem persisting, then there is a basis to raise rates but if we see the problem is starting to ease off, then that would provide the basis for a change.”
Gokarn also said that higher income levels were increasing the tolerance for higher inflation.