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![The RBI governor Rajan said "given the uncertainties, the Reserve Bank will stay on hold" [Xinhua]](http://thebricspost.com/wp-content/uploads/2015/12/240564199_8-e1448959507411.jpg)
The RBI governor Rajan said “given the uncertainties, the Reserve Bank will stay on hold” [Xinhua]
The Reserve Bank of India had eased rates by 150 basis points since January 2015, including a 25 bps reduction at its last policy review in early April.
“The inflation surprise in the April reading makes the future trajectory of inflation somewhat more uncertain,” the central bank said.
“We haven’t changed stance to either neutral or tightening. We are looking for room to ease. But there is lot of uncertainty. Given the uncertainties, the Reserve Bank will stay on hold, but the stance of monetary policy remains accommodative,” Central Bank Chief Raghuram Rajan said on Tuesday.
Rajan’s term ends in September and there has been widespread speculation on whether he would get an extension, considering stiff opposition from members of the ruling Bharatiya Janata Party (BJP).
Rajan has been vocal on the country’s bad loan problem.
India’s banks are saddled with about $120 billion in stressed loans, or 11.5 per cent of the total, with 27 public sector banks accounting for the lion’s share.
Surging bad debt and higher provisions to cover for them caused 10 Indian state-owned lenders to report combined losses of $2.3 billion for the March quarter.
Central bank Governor Raghuram Rajan has continually warned about lenders’ hidden bad debt, and started the audit of banks’ nonperforming loans on Oct. 1 in a bid to improve disclosures of soured credit and force banks to set aside more cash to cover potential write-offs.
TBP and Agencies
