MUMBAI (Reuters) - The Reserve Bank of India (RBI) will not hold interest rates high any longer than is necessary, and if disinflation proceeds as warranted, there will eventually be room to cut rates, governor Raghuram Rajan told a media briefing after the policy review.
The central bank is monitoring the liquidity situation and trying to keep the call money rate close to 8 percent, Rajan said.
India's central bank kept its key policy repo rate unchanged on Tuesday as widely expected, but warned about inflationary risks should a shortfall in monsoon rains spark a surge in food prices.
(Reporting by Suvashree Dey Choudhury; Writing by Swati Bhat; Editing by Sunil Nair)