India central bank leaves interest rate unchanged

Associated Press

MUMBAI, India (AP) — India's central bank is leaving its key interest rate unchanged, even as it says the economy will grow more slowly than projected and inflation will be worse than it thought.

The Reserve Bank of India trimmed the cash reserve ratio by a quarter of a point Tuesday, to 4.25 percent. It says this will inject 175 billion rupees into the banking system.

RBI slashed its growth outlook for the year ending March, to 5.8 percent from 6.5 percent. It said headline inflation will likely hit 7.5 percent in March, up from an earlier forecast of 7 percent.

RBI has been under pressure from New Delhi and business leaders to cut interest rates as growth slipped to its lowest level since 2009, but the bank says inflation remains its "primary focus."

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