RBI not biased towards either raising or cutting rates: Rajan

Says action will depend on inflation data

The Reserve Bank of India is not biased towards either raising or cutting interest rates, and its monetary policy stance will depend only on inflation data, Governor Raghuram Rajan told analysts in a conference call on Wednesday.

"As data comes in we will have a better view of what is happening and adjust accordingly, so I shouldn't assume that we're either biased towards raising rates or cutting rates at this point," Rajan said.

RBI will also re-examine foreign investment limit in government debt, Rajan said.

The central bank governor said that he expects the allocation available for foreign investors in government bonds to increase as short-term debt matures, but added the central bank would over time "re-examine the limit and see what we can do."

 

As of Tuesday, 96.6% of India's $25 billion government debt limit for foreign institutional investors was utilised.

 

Rajan also said the central bank is talking to Euroclear and other organisations to allow trading in Indian government bonds to be settled through their systems.

The RBI kept its key policy repo rate unchanged at 8% on Tuesday and said it will refrain from cutting interest rates until it is confident that consumer inflation can be reduced to a target of 6% by January 2016.