Rajan holds India rate, rebuffing pressure from government

Mumbai

INDIAN central bank governor Raghuram Rajan kept interest rates unchanged, rebuffing pressure from the Finance Ministry to reduce borrowing costs that are among the highest in Asia.

Mr Rajan left the benchmark repurchase rate at 7.25 per cent after three cuts this year, including in June, the Reserve Bank of India (RBI) said in a statement in Mumbai on Tuesday. The move was predicted by 39 of 42 economists in a Bloomberg News survey. Three expected a cut to 7 per cent.

"Given that policy action was front-loaded in June, it is prudent to keep the policy rate unchanged at the current juncture while maintaining the accommodative stance of monetary policy," Mr Rajan said in a statement.

The central bank will monitor for room to ease policy as it awaits greater transmission of previous cuts, he n…