No hikes if inflation stays below 8.5%: RBI

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Duvvuri Subbarao, governor of the Reserve Bank of India (RBI), said on Monday that the central bank's 75 basis point hike of the cash reserve ratio on Friday was calculated as a "carefully weighted trade-off" to soothe inflationary pressures without choking growth.

"Inflation has been driven mainly by rising food prices on the back of shortage of supplies," he said at the central bank's inaugural post-meeting teleconference, adding that wholesale price inflation excluding food stood at 2.1%.

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