Deepak Parekh expects CRR, interest rate hikes

HDFC chairman Deepak Parekh believes that the Reserve Bank of India (RBI) may take steps like hiking interest rates and CRR to contain inflation, which has doubled in the last four months. “(RBI) may have to take some steps to contain inflation by using the monetary mechanism,” Parekh said at the Ideas Exchange organised by the Express Group in New Delhi on Tuesday.

Parekh said inflation was “a cause of immense worry” and that keeping it under control was more important than a high growth rate. “The government also thinks that inflation control is more important than growth. And if one thing has to be sacrificed, growth can be sacrificed. But inflation cannot go on the way it has gone,” he said.

Inflation has risen to a 14-month high of 6.68 per cent, prompting the government to convene an emergency meeting of the cabinet committee on prices on Monday, which lowered duties on a host of items.