RBI has space for more rate hikes despite growth cheer

The Reserve Bank of India (RBI) is hinting that it may raise interest rates again despite recent economic growth. This is because inflation, driven by rising oil prices and the El Nino weather phenomenon, is still a concern. Higher interest rates can help control inflation by making borrowing more expensive, but they can also slow down economic growth.

Why it matters

The RBI is concerned about quickening inflation, which could be driven by rising oil prices and the effects of El Nino. This may lead to further monetary policy tightening to control inflation.

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