RBI keeps rates on hold, says may ease in early 2015

Mumbai

INDIA'S central bank held interest rates steady as widely expected at a policy review on Tuesday, and said it could ease monetary policy early next year provided inflationary pressures do not reappear and the government controls the fiscal deficit.

Uneasy over India's weak recovery from its slowest phase of growth since the 1980s, the six-month-old government of Prime Minister Narendra Modi had been seen as favouring an early reduction in rates, but Reserve Bank of India (RBI) governor Raghuram Rajan said containing inflation was a prerequisite.