India interest rates kept on hold Published duration 3 February 2015

image copyright Getty Images image caption Industry has been clamouring for more rate cuts

India's central bank has kept interest rates unchanged, three weeks after it announced a surprise cut.

The benchmark interest rate, or the level at which The Reserve Bank of India (RBI) lends to commercial banks, is to stay at 7.75%.

RBI chief Raghuram Rajan said the bank was awaiting further signs of declining inflation ahead of this month's budget.

Asia's third-largest economy has been battling an economic slowdown and has a history of high inflation.

"We are looking for further cues on progress of disinflation. And on the fiscal front we have the budget coming up. So those are the important developments we would pay attention to," Mr Rajan told reporters.

The budget is on 28 February.

Last month, the RBI cited a "sharper-than-expected decline" in the price of fruit and vegetables since September last year as one reason for the rate cut.

The RBI has been under pressure from government and businesses to reduce its interest rate further to give the struggling economy a boost.

Lower interest rates lead to increased lending, which in turn helps economic expansion.

Consumer prices rose 5% year-on-year in December, well within the RBI's target of a 6% by next January.