India keeps interest rates unchanged at 8%

Raghuram Rajan, governor of the Reserve Bank of India (RBI).
Vivek Prakash | Bloomberg | Getty Images
Raghuram Rajan, governor of the Reserve Bank of India (RBI).

India's central bank kept its key policy repo rate unchanged at 8.0 percent on Tuesday, as widely expected, while expressing concerns about risks to its target to bring consumer inflation down to 6 percent by January 2016.

The Reserve Bank of India (RBI) also kept both the statutory liquidity ratio (SLR) and the cash reserve ratio (CRR) unchanged. SLR is the minimum bond holding requirements that lenders must set aside, while CRR determines the percentage of bank deposits that must be kept at the central bank.

However, it said it would cut the ceiling on bonds that must be held-to-maturity from the current 24 percent to 22 percent in stages starting in the bi-weekly cycle beginning in Jan. 10, 2015. It expects to complete the process by September 2015.

Only three of the 46 economists polled by Reuters ahead of the policy review had expected a rate cut. The repo rate has been unchanged since January, when the RBI increased it by a quarter percentage point.