RBI keeps policy rates on hold at 7.25%
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Mumbai, August 04 (ANI): The Reserve Bank of India (RBI) kept its policy rate on hold at 7.25 percent on Tuesday, as widely expected, while leaving the door open to ease further depending on the inflation outlook and how swiftly banks lower their lending rates. The RBI also said government economic reforms and the timing of any increase in U.S. interest rates would be key factors that will determine whether the central bank cuts rates for a fourth time this year. The next policy review is set for September 29. Any increase in US rates decided at a Federal Reserve meeting earlier that month is expected to suck money out of emerging markets. RBI Governor, Raghuram Rajan, said they were also monitoring inflation and monsoon trend in the country. Rajan added that the Reserve Bank awaits greater transmission of its front-loaded past actions, it would monitor developments for emerging room for accommodation. The RBI governor currently has wide discretion in deciding interest rates. Rajan said there was "broad consensus" on the structure of the committee and the powers of the governor.
