India's central bank keeps policy rates steady at 5.25% as U.S., EU trade deals ease growth concerns

India’s central bank on Friday kept its policy rates unchanged, as headwinds to growth have weakened following the announcement of trade deals with the E.U. and the U.S.

Economists polled by Reuters had forecast the policy rate to remain unchanged at 5.25%.

“External headwinds have intensified, though the successful completion of trade deals augurs well” for overall economic outlook, said Sanjay Malhotra, governor of Reserve Bank of India, explaining the reason for hitting a pause on the easing cycle.

He added that in the near term, domestic inflation and growth outlook remain positive.

The Reserve Bank of India cut benchmark rates by 125 basis points last year, and economists say the focus will now shift to transmission of the previous rate cuts.