In his maiden monetary policy decision, Reserve Bank of India (RBI) Governor Raghuram Rajan surprised the markets — in euphoric mood after the US Federal Reserve postponed plans to cut the asset-purchase programme — by raising interest rates for the first time in nearly two years to ward off rising inflation.

RBI, however, scaled back some of the emergency measures put in place to support the struggling rupee, bringing down the cost of funds for banks.

In his post-policy media briefing, Rajan set the tone by saying: “The postponement of tapering is only that, a postponement. We must use this time to put our house in order, to create a bulletproof national balance sheet.” Read More