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RBI leaves rates unchanged, warns of inflation risks

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Reserve Bank of India (RBI) kept interest rates unchanged but said food prices and falling currency pose inflationary risks.

 

The current account deficit hit 5.4% of GDP in the April-December period, exacerbating pressure on the rupee.

 

The central bank left its policy repo rate unchanged at 7.25% and kept the cash reserve ratio (CRR), or the share of deposits banks must keep with the central bank, steady at 4% despite some signs of moderating inflation in recent months.

 

“It is only a durable receding of inflation that will open up the space for monetary policy to continue to address risks to growth,” the RBI said in a statement.

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