RBI Will Not Hold Rates High Any Longer Than Necessary: Rajan

The Reserve Bank of India (RBI) will not hold interest rates high any longer than is necessary, and if disinflation proceeds as warranted, there will eventually be room to cut rates, Governor Dr Raghuram Rajan told a media briefing after the policy review.

The central bank is monitoring the liquidity situation and trying to keep the call money rate close to 8 per cent, Dr Rajan said.

India's central bank kept its key policy repo rate unchanged on Tuesday as widely expected, but warned about inflationary risks should a shortfall in monsoon rains spark a surge in food prices.

Copyright: Thomson Reuters 2014