The Reserve Bank of India left its interest rates on hold and signaled to the markets a more dovish outlook. The RBI said that its monetary policy would be more accommodative of growth in 2012. The RBI held lending rate on hold at 8.5% and borrowing rate at 7.5%. The shift in outlook is a sharp change from the RBI’s hawkish outlook. The RBI has raised rates since March 2010 in an effort to curb inflation. In a page taken from other central banks, the RBI said, “The global economic outlook has worsened significantly. From this point on, monetary policy actions are likely to reverse the cycle, responding to the risks to growth.”
