RBI likely to hold rates, keep liquidity easy to boost bank lending

The rupee is now nearly 6 per cent off its low and is expected to rally further as lower crude prices have also eased worries over India's current account deficit

Analysts expect India's central bank to support an economy that is losing momentum by leaving interest rates unchanged at a policy meeting on Wednesday when just over a month ago most of them had predicted a hike.

Having resisted any temptation to jack up rates in October when the rupee was sliding to a record low against the dollar, the Reserve Bank of India has been vindicated by the currency's subsequent recovery, and by waning inflationary pressures thanks to falling food and oil prices.

The rupee is now nearly 6 per cent off its low and is expected to rally