India: Interest rates on hold at 8%

INDIA’S central bank kept interest rates on hold yesterday, worried inflation may not cool as fast as hoped. The Reserve Bank of India (RBI) maintained the benchmark repo rate, at which it lends to commercial banks, at 8 percent, in line with analysts’ expectations. “There are risks from food price shocks as the full effects of the monsoon’s passage unfold, and from geopolitical developments that could materialise rapidly,” RBI governor Raghuram Rajan said after a monetary policy meeting in Mumbai. Wholesale price inflation fell to a near five-year low in August, but retail inflation, which the bank tracks closely, is hovering near 8 percent. – Sapa-AFP