RBI may hike rates in case cereal inflation picks up: Analysts

The Reserve Bank of India (RBI) is likely to rely on liquidity management to tackle a spike in vegetable prices which are more temporary in nature, but it could hike rates if cereal inflation begins to pick up, analysts said on Friday. A day after the release of the minutes of the last meeting of the RBI's rate-setting panel, foreign brokerage HSBC, in a note, said the central bank will use liquidity management tools as the first line of defence as long as it sees food price pressures arising from just a few items like tomatoes.

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