India's Rajan says no to 4th rate cut on food price surge

Aurangabad, India

PRICES of many foodstuffs are surging in India, despite a good start to monsoon rains - an unexpected boon for wholesalers, but a major headache for the central bank and a government hoping for its help to reboot the economy.

Reserve Bank of India (RBI) governor Raghuram Rajan has cut interest rates three times this year to boost growth, but he has since warned that he will not cut again if poor rains drive up prices and threaten his inflation target.