Rajan 'cognisant' of state financing needs as RBI loosens credit restraints

Reserve Bank of India in Mumbai

The Reserve Bank of India (RBI) held interest rates and unveiled a suite of liquidity measures today, in its first policy announcement since new prime minister Narendra Modi swept to power last month.

Raghuram Rajan, the RBI governor, said it was "appropriate" to leave policy on hold and let the "disinflationary effects" of earlier rate cuts work their way through the economy.

Annual CPI inflation increased from 8% in February to 8.6% in April, on account of a "sharp" increase in food prices.

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