India's central bank leaves interest rates unchanged

India's central bank kept its key lending rates unchanged during its monetary policy review on Tuesday, sticking to its stand that further cuts will depend on commercial banks passing on the previous reductions to borrowers, among other factors.

Reserve Bank of India Governor Raghuram Rajan chose to maintain both the repo rate, or the short-term lending rate, and the cash reserve ratio, or the liquid money banks have to compulsorily hold, at 7.25 percent and and 4.0 percent, respectively.

Accordingly, the reverse repurchase rate, or the central bank's borrowing rate, has also been left unchanged at 6.25 percent.

Speaking about the current situation pertaining to growth and inflation, among other issues, Rajan said: "Taking into account all this, and given that policy action was front-loaded in June, it is prudent to keep the policy rate unchanged at the current juncture while maintaining the accommodative stance of monetary policy."