India's central bank holds rates, as expected

Security personnel at the entrance of the Reserve Bank of India headquarters in Mumbai. — AFP

MUMBAI: India's central bank kept its key lending rate steady for a second straight policy meeting on Thursday, as widely anticipated, as it looked to assess the impact of past rate increases amid slowing inflation.

The monetary policy committee (MPC), which has three members from the Reserve Bank of India (RBI) and three external members, kept the repo rate steady at 6.50% in a unanimous decision.

All 64 economists in a Reuters poll taken between May 16 and 29 expected no change in rates.

The RBI's policy stance was maintained as "withdrawal of accommodation" to ensure inflation progressively aligns with the committee's target while remaining supportive of growth, Governor Shaktikanta Das said while announcing the MPC's decision.

"Our goal is to achieve the inflation target of 4% and keeping inflation within the comfort band of 2-6% is not enough," Das said.

The committee will act "promptly" and as required to keep inflation expectations anchored, Das said.

India's hold on rates contrasts with recent central bank actions elsewhere.

Two major central banks - the Reserve Bank of Australia and the Bank of Canada, have surprised markets this week by resuming rate hikes to combat stubbornly high inflation, pushing up bond yields across developed markets.

The Indian central bank sees growth in 2023/24 at 6.5% while retail inflation is seen averaging 5.1%, Das said.

"Domestic macroeconomic fundamentals are strengthening," he said. - Reuters

Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

India , RBI , inflation


Next In Business News

CEO shares insights into group’s outlook
Steady outlook for luxury condominium segment
Sime Darby cements its position as key auto player
Wall St set for slight rebound with focus on Fed speakers, economic data
Govt should institute bolder tax reforms to meet deficit target
Ringgit ends slightly higher tracking the positive equity market
Chin Hin triggers MGO after raising stake in Ajiya
ITMAX wins RM111.2mil smart city contract in Johor
PETRONAS, MOL and MISC to jointly develop LCO2 carriers for CCS projects
FBM KLCI snaps losing streak, up 2.02 points

Others Also Read