India's Rajan calls on govt to set up monetary panel soon; holds rate

Mumbai

AT HIS last policy review as head of the Reserve Bank of India, Raghuram Rajan kept key interest rates unchanged on Tuesday to cool inflation running near two-year highs, while also pushing for a policy panel to be formed in time for a review in October.

The decision to hold the repo rate at 6.50 per cent had been widely expected after consumer inflation accelerated to 5.77 per cent in June, near the top of the Reserve Bank of India's 2-6 per cent range, and above its target of 5 per cent by March next year. "It is appropriate for the Reserve Bank to keep the policy repo rate unchanged at this juncture, while awaiting space for policy action," the RBI governor said in his statement.