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Indian central bank cuts growth forecast to 7.1%

Wary of impact of demonetization, RBI surprises by holding policy rate steady

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People walk past the Reserve Bank of India head office in Mumbai.   © Reuters

MUMBAI/NEW DELHI -- In its first monetary policy review since the shock demonetization of high-denomination bank notes a month ago, India's central bank on Wednesday kept the benchmark interest rate unchanged at 6.25% and slashed its economic growth forecast for the current fiscal year to 7.1% from 7.6%, citing short-term disruptions in economic activity and demand compression.

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