RBI is scheduled to hold its next monetary policy review meeting on September 29 where Rajan is widely expected to announce this year's fourth rate cut and expectations for the same have further increased after the US Federal Reserve last night decided on a status quo to its ultra-low rare regime.

Addressing industry leaders and bankers here this morning at an event, Rajan said that limping global growth coupled with uncertainty about the US growth probably compelled the Federal Reserve to keep rates on hold.

On situation in India, he added the Consumer Price Index (CPI) based retail inflation at 3.6 percent currently was 'largely due to base effect' excluding which it would be around 5.5 percent.

"The differential between WPI (Wholesale Price Index) and CPI is a source of problems. We have to be careful while pursuing growth and have to make it sustainable. The key is to keep inflation low not just today, but also in the future," Rajan stated.

On the US central bank's decision to delay the much awaited rate hike, Rajan said, "We have noted the Fed decision of yesterday. I presume it reflects their desire to wait for more information before they take a final view. Clearly, thus far the markets seem to have reacted somewhat benignly certainly toward us. What we will have to do is continue what we have been doing which was anyways the intention regardless of the Fed decision."

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