RBI leaves rates unchanged, warns of inflation risks

Reserve Bank of India (RBI) kept interest rates unchanged but said food prices and falling currency pose inflationary risks. The current account deficit hit 5.4% of GDP in the April-December period, exacerbating pressure on the rupee. The central bank left its policy repo rate unchanged at 7.25% and kept the cash reserve ratio (CRR), or the share of deposits banks must keep with the central bank, steady at 4% despite some signs of moderating inflation in recent months. "It is only a durable receding of inflation that will open up the space for monetary policy to continue to address risks to growth," the RBI said in a statement.