India rates on hold, growth to slow further

MUMBAI, India (AP) ? India's central bank is keeping interest rates unchanged even as it warns that a weak monsoon and global risks will drive down economic growth faster than anticipated.

The Reserve Bank of India on Tuesday slashed its growth forecast for the fiscal year ending in March 2013 to 6.5 percent from an earlier projection of 7.3 percent. It also said inflation for the fiscal year will be 7.0 percent, up from its April forecast of 6.5 percent.

The bank says its primary focus remains "inflation control." It says cutting rates now will only aggravate inflation without "necessarily stimulating growth."

It left the key repo rate unchanged at 8.0 percent.

India's economy has been slowing for four quarters now, hitting a nine-year low of 5.3 percent in the quarter ended March.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-07-31-India-Economy/id-002367bc9d4c4ca8ad264214ac8aaaf5

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