To focus on meeting 5% inflation aim by March end, says Rajan

The central bank kept its policy repo rate unchanged at 6.50% but kept room for further cuts open

The Reserve Bank of India (RBI) will focus on achieving 5 per cent consumer price inflation by end-March, Governor Raghuram Rajan said, after the central bank expressed concerns over an upside risk to that target at its policy review on Tuesday.

"For now, what is primarily in our mind is meeting the 5 per cent target."

The RBI kept its policy repo rate unchanged at 6.50 per cent but kept room for further cuts open, though it raised concerns over upward pressure on food and commodity prices.

Rajan also said the central bank was armed with significant foreign exchange reserves and the longer maturity profile of its external debt would enable it to handle global shocks such as the possibility of Britain's exit from the eurozone, though it could create short-term volatility in India's financial markets.