Tuesday's rate hike may not be the last in short-term: FM

A day after the Reserve Bank of India raised its key interest rates to check inflation, finance minister Pranab Mukherjee on Wednesday indicated it may not be the last increase for now.

A day after the Reserve Bank of India raised its key interest rates to check inflation, finance minister Pranab Mukherjee on Wednesday indicated it may not be the last increase for now.

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“I don’t think it is end of the tunnel,” he said. “It does not happen (that way).” He was responding to questions whether RBI is nearing the end of the interest rate increase cycle.

When asked whether he was surprised by the 50 basis points increase in key interest rates by the RBI on Tuesday, Mukherjee said, “I cannot say it surprised me. It is substantial no doubt, but given the situation it was necessary.”

Inflation at 9.4% in June was “reasonably high and unacceptable,” Mukherjee said.