US Fed will not be key to determining interest rates: Rajan

The Reserve Bank of India's rate decisions are driven by domestic factors and the US Federal Reserve will not be the key factor while determining future rate moves, its chief Raghuram Rajan said after its annual policy review on Tuesday.

The Reserve Bank kept interest rates on hold at 7.50% on Tuesday, waiting for more clarity on inflation after heavy rains raised uncertainty about food prices and seeking to grant banks more time to reflect its previous rate cuts.

The country has adequate buffer against the impact from the Fed policy, Rajan added.

The central bank is also waiting to see policy transmission take place and banks over time will be forced to match markets and bring down rates, he added.