India central bank leaves interest rates unchanged

AFP, Mumbai :

India’s central bank held interest rates steady on Wednesday but left the door open for future cuts, as growth moderates in the world’s fifth largest economy.

The Reserve Bank of India said the benchmark repo rate — the short-term interest paid by the central bank on loans from commercial lenders — will stay unchanged at 6.50 percent for the tenth meeting in a row.

Central bank governor Shaktikanta Das said the bank would remain “unambiguously focused” on aligning inflation with its target while still supporting growth.

“It is with a lot of effort that the inflation horse has been brought to the stable,” he said.

“We have to be very careful about opening the gate as the horse may simply bolt again.” Major central banks around the world have kicked off a global easing cycle in response to lower inflation — including the US Federal Reserve, which last month brought down rates for the first time in over four years.

India’s retail inflation came in at 3.65 percent in August, slightly higher than the 3.54 percent recorded in July, with both figures below the central bank’s four percent target.