India's inflation is slowing, as suggested by momentum indicators, and the ceiling for interest rates has been reached, the Reserve Bank of India (RBI) Deputy Governor Subir Gokarn said on Thursday.
Gokarn, who handles monetary policy, said the rupee appears to be stabilising as REER (real effective exchange rate) moves towards neutral. REER is the rupee's value against a basket of currencies of India's largest trading partners, adjusted for inflation.
Gokarn was speaking at a conference in Singapore.
The annual food inflation eased for a ninth straight week to its lowest in nearly six years in mid-December on improved supplies, bolstering hopes of a cooling in overall inflation which should allow the central bank to cut rates.
The RBI, which has raised its interest rates 13 times since March 2010, left its key lending rate, the repo rate, steady at 8.50% last month.