Raghuram Rajan eases rate hike worries, says RBI's stance neutral

The Reserve Bank of India (RBI) has a neutral stance on interest rates for now, but it is still worried about high inflation, even when taking out volatile food prices, its new head said on Thursday.

Asked about the Reserve Bank of India's policy stance, Raghuram Rajan said: "At this point we are neutral, we will see how things develop."

He said that inflation was not due just to higher food prices.

"Unfortunately there is still some inflation when you strip out the effects of food and energy. Therefore it is not just food, it's other factors also which are driving inflation," Rajan told reporters on the sidelines of a conference.

"CPI core (inflation) is about 8.2 percent, that is certainly high, but I think we are looking at all aspects of inflation at this point."