India's RBI keeps rates on hold, maintains easy stance

Mumbai

INDIA'S central bank kept interest rates on hold at 7.50 per cent on Tuesday, choosing to wait longer to assess inflationary pressures before making its next move, and to give banks more time to adjust lending rates to reflect previous rate cuts.

The Reserve Bank of India said in a statement after its policy review that it would maintain an "accommodative stance", but also cited risks, raising some uncertainty about when the central bank would cut interest rates next.

Governor Raghuram Rajan did not expect RBI policy to be blown off course by the prospect of the Federal Reserve raising US rates. Whereas higher US interest rates are expected to lead to capital outflows from some emerging market economies, the Indian rupee has remained firm against other currencies thanks to strong inflows. "At this point ... we feel we are adequately buffered. That is not going to be the key factor in determining our monetary policy stance going f…