Hyderabad: India's central bank has relatively little room to cut interest rates now, Deputy Governor Subir Gokarn said on Tuesday, reiterating guidance given in April.
He pointed to inflation, and said there is a risk that it could accelerate again, given that oil prices remain high.
The Reserve Bank of India is conscious also of the recent volatility in currency movements, and it has direct and administrative tools to deal with the issue, Gokarn said at a conference.
His comments come at a time when the Indian rupee has partially recovered after touching a near five-month low last week. It was last trading at 53.02 to the dollar.
India's central bank doesn't give details of its intervention, and has a stated policy of getting into the market only to control volatility.
At its April policy review, the RBI slashed rates by a sharper-than-expected half a percentage point, but said that there is limited scope for more cuts.
Dow Jones
First Published: Tuesday, May 08, 2012, 13:03