RBI Holds Rates Whilst Signalling Cut to Come

India’s central bank left interest rates unchanged for a fifth straight meeting while signaling a possible easing early next year after the government called for lower borrowing costs.

Governor Raghuram Rajan kept the benchmark repurchase rate at 8 percent, the Reserve Bank of India said in a statement in Mumbai today, a move predicted by 44 of 48 economists in a Bloomberg survey.

“A change in the monetary policy stance at the current juncture is premature,” Rajan said in the statement. “However, if the current inflation momentum and changes in inflationary expectations continue, and fiscal developments are encouraging, a change in the monetary policy stance is likely early next year, including outside the policy review cycle.”


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