India central bank's Rajan says comfortable with pace of disinflation

[MUMBAI] Reserve Bank of India Governor Raghuram Rajan said on Tuesday the central bank was"comfortable" with the pace of disinflation, although it would monitor rainfall in August "very carefully."

Mr Rajan, at a conference call with analysts, also said the central bank was looking at how inflation expectations at households were changing, rather than the levels themselves.

The comments come after the RBI earlier in the day kept its policy rate on hold at 7.25 per cent, but left the door open for further easing. However, it highlighted some risks, including a return of households' near-term inflation expectations to double digits.

"Thus far we are comfortable with the pace at which disinflation is taking place and is expected to take place given our targets," Mr Rajan told the analysts.

REUTERS