RBI chief says need to raise rates to curb inflation

Last Updated: Mon, Aug 01, 2011 11:52 hrs

India needs to raise interest rates to restrain inflation, said Duvvuri Subbarao, governor of the Reserve Bank of India, on Monday.

Restraining inflation will ensure medium-term economic growth is sustainable, he said in a speech on India and the global financial crisis.

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The 10-year benchmark bond yield rose 2 basis points to 8.45 percent after the governor's comments.

Last week, the RBI had raised interest rates by 50 basis points in a bid to tame inflation amid signs of slowing economic growth. It was the 11th rate increase since March 2010.

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