India rates on hold in first review since electionBy AP News Jun 03, 2014 3:51PM UTC
MUMBAI, India (AP) — India’s central bank has kept key interest rates unchanged in its first policy review since a new, pro-business government took power.
Reserve Bank of India Governor Raghuram Rajan has made curbing inflation his priority in the nine months since he took the reins of the bank. He has steadfastly resisted pressure to cut interest rates to try to kick-start sluggish economic growth.
He left the key repo interest rate at which banks borrow from the reserve bank at 8 percent on Tuesday. Rajan recently met new Prime Minister Narendra Modi and the rate decision may have been no surprise to the government.
Rajan has argued that reviving economic growth requires economic reform and that slashing interest rates would do little except encourage consumer inflation that last year reached double digits.