India central bank holds rates, surprises with neutral policy stance

Mumbai

INDIA'S central bank kept its policy rate on hold on Wednesday, warning about the risks of high inflation and downplaying the economic impact from a radical crackdown on "black money," a view that differs with more pessimistic private forecasts.

The Reserve Bank of India (RBI) also said it was changing its policy stance to "neutral" from "accommodative", surprising financial markets and sending bond prices sharply lower on fears that it is signalling its current rate-cutting cycle is over.