Will not hold rates high any longer than necessary: Rajan

The Reserve Bank of India (RBI) will not hold interest rates high any longer than is necessary, and if disinflation proceeds as warranted, there will eventually be room to cut rates, governor Raghuram Rajan told a media briefing after the policy review.

The central bank is monitoring the liquidity situation and trying to keep the call money rate close to 8 percent, Rajan said.

India's central bank kept its key policy repo rate unchanged on Tuesday as widely expected, but warned about inflationary risks should a shortfall in monsoon rains spark a surge in food prices.

EDITORIAL OF THE DAY

  • Dictating retail price of a commodity goes against the grain of free market economy

    The Centre’s suggestion to states to cap prices of pulses and edible oils seems to indicate a bankruptcy of ideas in the government.

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