RBI is moving to loosen monetary policy

The deputy governor of India's central bank said today the bank is moving toward a looser monetary policy, though the timing of any easing will depend on the state of the nation's economy.

"The future action will be easing," Subir Gokarn said at the Credit Suisse Asian Investment Conference in Hong Kong. "But when will that happen and at what pace? It's a matter of judgment."

Gokarn also said higher oil prices continue to weigh on the country's fiscal deficit.

At its rate-setting meeting on March 15, the Reserve Bank of India left its key lending rate unchanged, saying that risks to inflation have increased due to a recent rise in crude oil prices, a wide fiscal deficit and a weakening rupee.