The Economic Times

RBIs success on dollar flows raises stakes in inflation fight & clamour for rate hike

Indias record $133 billion diaspora inflow has flooded banks with liquidity, pushing overnight rates below the RBIs 5.25% policy rate. The Reserve Bank has already drained more than 1 trillion as food and oil prices fuel inflation concerns. Markets now expect further liquidity measures and are increasingly pricing in a possible RBI interest-rate hike.