IMF advises India to be cautious with interest rate hikes

New Delhi, Dec 24 (KNN) Flagging headwinds, the International Monetary Fund (IMF) said on Friday that India should be carefully while consider its future interest rate hikes.

It has recommended India to cautiously calibrate its intervention in the foreign exchange market should be limited to managing volatility.

Since May, Reserve Bank of India (RBI) has raised its key policy rate by 225 basis points, taking the rate to the highest in over three years.

IMF in its annual consultation report said that inflation pressures have led to an appropriate shift towards policy tightening.

“Additional tightening should be carefully calibrated and communicated,” it added.

The IMF projected inflation at 6.9 per cent for the current fiscal year that ends on March 31, 2023 and said price gains would moderate gradually.  (KNN Bureau)