MUMBAI: India’s central bank left its key interest rate unchanged at 5.50 percent on Wednesday.
The decision comes as US President Donald Trump escalates threats to raise tariffs on Indian imports.
The Reserve Bank of India (RBI) maintained the repurchase rate following a unanimous vote by its six-member panel.
Most analysts had expected a pause after June’s unexpected 50-basis-point cut.
RBI governor Sanjay Malhotra stated that global trade challenges persist but India’s economy remains resilient.
“We have taken decisive and forward-looking measures to support growth,“ he said in a statement.
The RBI had cut rates three times this year, including its first reduction in nearly five years in February.
India anticipates above-average monsoon rains, which analysts say could boost agricultural output and rural incomes.
However, Trump’s warning of “substantially” higher tariffs on Indian goods has added economic pressure.
Existing US tariffs on Indian products were already set to rise from 10 percent to 25 percent this week.
Malhotra acknowledged that tariff uncertainties persist despite India’s robust growth outlook.
Trump’s move follows his threat of new sanctions on Russia unless progress is made in Ukraine peace talks.
Though not a major exporter, India counts the US as its largest trading partner. – AFP
