CNBC's Joe Kernen reacted to news from the Indian central bank by forwarding a number of racial stereotypes against Indian-Americans.

On September 20, India's central bank unexpectedly raised interest rates by a quarter percentage point to address concerns over inflation.

Reacting to the news and its effect on exchange rates on the September 20 edition of CNBC's Squawk Box, co-hosts Joe Kernen, Becky Quick, and Andrew Ross Sorkin turned the discussion to the rupee. After Quick noted that she still had rupees left from a recent trip to India, Kernen repeatedly stated the name “Gandhi” -- whose likeness appears on the rupee -- in a stereotypical Indian accent and later asked, “Are they good at 7-11?”

After Quick told Kernen his comments were insulting, Kernen apologized, saying, “I'm sorry, I take it back. I apologize, before I have to.”

Here's a full transcript of the exchange:

QUICK: I think I have rupees in my wallet right now. KERNEN: From your trip? QUICK: No, I think I honestly do from the last time I was in India. KERNEN: Really? QUICK: Yeah, I think I might. Hold on. KERNEN: You got a rupee in your wallet? QUICK: I think I do. SORKIN: That sounds a little, um. KERNEN: You've got to be kidding. There is the rupee chart, just in case you were wondering where the rupee is. The dollar had been soaring, look what happened when we said we were going to keep pumping. QUICK: I do. KERNEN: Becky's got a rupee. SORKIN: A rupee! QUICK: Here's a fifty and a ten. SORKIN: How much are those worth, do we know? QUICK: I don't remember. SORKIN: Look at Gandhi. KERNEN: Well, ones worth ten and one's worth fifty, what do you mean? SORKIN: Gandhi's on the rupee. Look at that. KERNEN: Gandhi. Gandhi. Now. No, I can't make any jokes about that, I mean do they take - QUICK: [unclear] KERNEN: No I can't do it. I was going to say something. QUICK: Please don't. KERNEN: I really can't? QUICK: No, you can't. KERNEN: Are they good at 7-11? QUICK: Stop. KERNEN: Alright, alright, I won't. Let's look at the - people say that all the time. Right? Oh, you're nervous. SORKIN: They do. They do say that all the time. KERNEN: They do. They say it all the time. QUICK: It's insulting. SORKIN: I've heard that. KERNEN: It is. Alright, I'm sorry, I take it back. I apologize, before I have to.

UPDATE: In a statement to Mail Online shortly after Media Matters reported on his initial comments, Kernen apologized: