The Reserve Bank of India (RBI) is not likely to hike interest rates in its monetary policy review on October 27 even as inflation is expected to rise to 6 per cent this fiscal-end from 0.7 per cent at present, the Prime Minister's Economic Panel said today.
"I don't think the RBI will revise interest rates in the policy review... As far as the monetary policy is concerned, it has followed an accommodative policy, and unless inflation pressures are very strong, there may not be any change in the stance," Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan told reporters.
He said the RBI might wait to make any change in the policy rates.
The former RBI Governor further said prices will begin to rise from now on, mainly due to the low base of last year and rising food prices.
"By the end of the year, you will get an inflation rate even on wholesale price index of about 6 per cent," he added.
Inflation has been on the rise on the back of rising food prices and stood at 0.70 per cent for the week ending September 26.
Rangarajan said there is always a seasonal decline in prices in November and December, adding that "one might want to wait and see whether the seasonal decline occurs or not, and take action after the behaviour of prices".
