Reserve Bank of India (RBI) Governor Shaktikanta Das said the central bank does not want to surprise markets with a sudden rate hike, amid concerns surrounding inflation
"All our actions will be calibrated, they will be well-timed, they will be cautious," Das told CNBC. "We don't want to give any sudden shock or any sudden surprises to the markets."
The central bank had last cut interest rates in May 2020, and has retained an accommodative policy stance.
"We are constantly monitoring the situation and we will act at the appropriate time. At the current juncture, we feel that appropriate time has not come," Das told the news channel.
Consumer Price Index-Based inflation (CPI) for July came in at 5.59 percent, within the RBI's target range of 4 (+/-2) percent. In April and May, retail inflation was 6.3 percent and 6.26 percent respectively, above this target range.
Das told CNBC that "current inflation looks transitory", adding that the central bank expects inflation to moderate in the coming months.
He also said that some parts of the economy, such as the manufacturing and non-contact heavy service sectors, are showing a rebound.
"At this point of time, we are watching the revival of the economic activity — there is still uncertainty prevailing around the pandemic," Das said.Since the beginning of the pandemic, the RBI and the government have announced a number of measures to help the economy deal with the harsh impact of the COVID-19.