RBI Holds Interest Rates, as Expected

The Reserve Bank of India (RBI) stood pat on monetary policy Tuesday, despite signs of slowing growth in Asia’s third largest economy.

The central bank held the repo rate at 8 percent at its policy review, largely in line with expectations. Forty-one of 45 economists expected the RBI to keep its benchmark rate at 8 percent, while four expected a 25 basis-point reduction, according to a Reuters poll.

A combination of slowing growth and cooling inflation has led to growing calls for Governor Raghuram Rajan to ease monetary policy.  India’s economy hit a soft patch in the July-September quarter, with gross domestic product (GDP) growth slowing to 5.3 percent from 5.7 percent in the previous three months.


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